Don't Panic, But Tesla Is Losing Thousands On Every Model S It Sells

Industry News

That's not how this is supposed to work.

Reuters is reporting that Tesla loses more than $4,000 on every Model S it sells. This figure comes courtesy of CEO Elon Musk himself, with the dollar figure calculated using sales figures and operating losses. This sounds awful when you first hear it, but remember that Tesla is doing much more than just pumping out the Model S. It’s also preparing to launch the Model X SUV, building batteries and developing the entry-level Model 3. All this means is that the Model S alone isn’t nearly able to cover all that spending.

Musk himself said the company could sell more stock to raise money. That would help in the short term, as Tesla is worth a ton of money, at least according to its current stock prices and $31 billion market capitalization (current share value multiplied by amount of outstanding shares). No matter what Tesla does to cover its losses, the company is proving that striking out on your own in the auto industry is damn hard, especially when your sales model is "unique" and your only car on offer is an electric luxury sedan. Musk's company already lost a ton of money to start 2015 and it looks like these last few months won't be any better. Hopefully 2016 and the Model X bring better news on the financial front.

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