Yesterday, we reported that Tesla has introduced an all new "Supercharger" station that promises the equivalent of a 150-mile range from a 30 minute charge, a breakthrough that represents unprecedented mobility for all-electric vehicles.
However, despite its popular and critically acclaimed Tesla Model S sedan and Tesla's many examples of great engineering, the company continues to suffer from financial challenges.
Yesterday, Tesla Motors Inc. reported a significant cut from its forecasted 2012 revenue due to the slower-than-expected rollout of its new Tesla Model S sedan. Now, Tesla's adjusted 2012 revenue falls in the range between $400 million and $440 million, an enormous fall from the initial estimate of $5million to $600 million in annual revenue.
Explaining the new revenue outlook, Tesla Motors stated in a U.S. Securities and Exchange Commission filing that, "We have methodically increased our Model S production at a rate slower than we had earlier anticipated."
Tesla also added, "Certain suppliers have experienced delays in meeting our demand and we continue to focus on supplier capabilities and constraints."
To alleviate the issue, Tesla is working with its supplies to find ways to improve the timeliness of parts deliveries in order to increase production of the Model S. Optimized automation as well as second shifts for some factories are necessary to accommodate the increasing market demand. The two main priorities now are to significantly increase production volumes and to simplify the manufacturing process to improve efficiency and cut costs. As of now, Tesla is falling four to five weeks behind its previously announced 2012 delivery goals.
Following the reports of missed marks, Tesla's shares have fallen 9.8 percent by the day's close to $27.66 on Nasdaq. While the new revenue estimates seem dreadful, some analysts insist that Tesla Motors is a solid company with nothing but a bright future ahead. Morgan Stanley analyst Adam Jonas commented that the slow Model S roll out is "the worst-kept secret in the industry." Given that there are no surprises, Adam believes that fears of Model S production slow-down is "overdone."
In fact, Jonas is very impressed with Tesla's latest Model S. "We think Tesla has the right idea: Get it right the first time. Efficacy of the product is what matters most."
At the end of the day, there is no hiding that Tesla remains a start-up pitted against larger automakers. Adam Jonas acknowledges the inherent volatility -- a recall that may be insignificant to a company like GM may be crippling for a smaller company like Tesla. According to Jonas, investing in Tesla stock still requires a "leap of faith."
