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Can Tesla Transition From EV Boutique To EV Behemoth?

The automotive press and the first few Tesla sedan owners are raving about the quality and performance of the Tesla Model S sedan. Frank Markus of Motor Trend wrote, “The Model S bolts away from a stop like any EV, but it accelerates from 60 to 80 mph like a big gasser, continuing to pull strongly past 100 mph.” (Our high-speed test is here.)

Tesla (Nasdaq:TSLA) shareholders won’t be experiencing the same immediate thrill. Tesla’s revenue fell to $27 million in the second quarter, down from $30.2 million in the first quarter, and $58 million in the second quarter of 2011. Net loss for the quarter was $106 million, up from $90 million in Q2 2011. The fall in revenue was due to the diminishing deliveries of the limited edition two-seater roadster. But these financials are largely irrelevant, as it’s the next few quarters which will prove Tesla’s manufacturing mettle, ability to scale, and ability to reduce cost.

image via Tesla Motors

As Lindsay Riddell of the San Francisco Business Times reports, “It’s expensive to build a car company from scratch.” In the most recent quarter, Tesla spent $75 million on R&D, $36 million for operations, and $68 million to build out its network of showrooms and service centers. The company is investing immense resources into sales, service, and customer relations – there’s no underestimating good customer service in this kind of business.


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