Tesla Motors Stuck in Reverse

Tesla Motors reports surprise $108 million loss as deliveries fall short of estimates.
6:19 | 02/12/15

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Transcript for Tesla Motors Stuck in Reverse
Okay. It its third day February 12 the markets in New York are now open and our big number this morning 108. Million dollars. Now that's the amount of money Tesla Motors lost in the fourth quarter the electric car maker posting. A surprise loss as shipment problems affected deliveries. Although the company sold nearly 101000 vehicles in the holiday quarter. It was still below what Wall Street had in mind. Good morning everyone analyst victory in new York and after tests less earnings report shares of the company already down more than 5%. Here with more is Chris see if you tech editor at this street good morning to you. And I understand you've been covering tests look for awhile now when the company may be blaming shipment problems but how do you explain this walk us. You know part of the problem in the fourth quarter. Which were a little bit interesting tell investors and Wall Street they actually blamed customers being on vacation. The weather and shipping problems that customers being on vacation. Is a little bit adjusting because you don't really see that from an auto maker. Because generally customers as go to the dealerships but Tesla is a little bit different because they actually deliver the cars directly to you such a little bit of a concern. That test that was able unable to actually delivered a cars because they were their customers are on vacation. That's the reason for the shortfall this morning in the reason why shares are down about 67%. And what do you think about that idea that this company plans to invest heavily in capital expenditures. In your view is that a good plan or are they going overboard considering the situation there. Well building a car company is is really very capital intensive and Tesla is proven that and then some. It takes a lot of money to build out. You know of the model last of the gate a factory to produce the third generation car that's gonna come out in a couple years as wells upcoming SUV eight the model acts. On top of all those they have to build up the service stations. The super charger network where he can actually charged the cars as wells build out the retail stores so it's it's really capital intensive to run Tesla and Elon Musk and his team said that twenty fifteens going to be a very capital intensive year we should start to see some of that slowed down as the new products and new features roll out online but that's that's concerning to investors because that's a little bit more than that what they're expecting for the upcoming year. And what do you think I mean you already mentioned their plea is already full but do you think there's a chance that competition is finally becoming an issue. For this electric car company wants to really happening here. Well competition is still pretty small to this point. BMW. Nissan Mercedes of come out. As well shipment but they've lost they've announced new products but they can't really compete with what tests has on the market right now at the model as the model less. Top range is about 260 miles. Before you need to charge the battery out there's nothing really on the market that that could compete with that right now. And in terms of actual quality the BMW and Mercedes cars in a Mercedes is a hybrid BMW is a full electric. But still it's nowhere near in terms of the aesthetics. And as wells the features a Tesla has but the competitors are starting to creep up and there's concerns that within the next couple of years. As tassel starts to really ramp up. You know production of the third generation car which is going to be about 3540000. Dollars that's where the concern lies is not right now but in the next. Eighteen to 24 months. Where these. Bigger competitors who have bigger cash. Balances. And bigger distribution. Production lines the really compete with Tesla and potentially overtake it as well. So the concern is there a and that sales are down how ever. It's not all bad news coming the company projecting a pretty strong 2015 back cracked. Yet actually came out and opt production guidance for 2015. From 50000. Units to 55000. Units. And I was kinda looking for that. Going into the quarter so that was a nice thing for test the to give investors. They're pretty confident that they can deliver 55000. Units they're seeing really strong demand for not only the model last. Which is you know there are 67000. Dollar sedan. But also the model acts which is the SUV that's coming out later this year so they don't have a problem actually selling. To come up customers. There's no problem getting that but there's a problem getting it in the customer's hands and that's really where the problem lies for tests right now so once you see that. Problem become. Much less than what it is right now and I think they could potentially even raise a production volume from 55000. Say maybe 60000 or more. So the outlook is good now consider this the CEO. Actually calling and projecting that perhaps Tesla could reach apple the company apple in terms of in market value. Now that wishful thinking in your viewers that doable. Ilan mosque. If he's not anything he's very ambitious. And he certainly knows how to tell tussle story. It was it was a really almost shocking to come out. And hear him say that he thinks you know they could potentially have a 700 billion dollar market cap I think that's a long ways down mode the way. But ash has the transitions from just being a car company. To potentially you know disrupting. The energy storage business that I think there's you know a really good chance. That they can be worth a lot more than what they're worth today. But it's really hard to see right now how they get to be 700 billion from the twenty billion or so what their worth right now but still don't. Count test flat out got hey he's so much Chris Kia Kia from the street thank you so much for joining us this morning have a great day. And of course you can keep up with the latest headlines right here on abcnews.com. You have been watching the big number I'm with actor in New York.

This transcript has been automatically generated and may not be 100% accurate.

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