Despite reporting first quarter losses, Tesla has announced a “challenging” goal to hit its 500,000 car milestone two years earlier than originally planned. Citing high demand of the upcoming Model 3, Tesla is shifting its business strategy and setting its sights on long-term earnings. Instead of sticking to its original goal of 2020, Tesla aims to crank out its 500,000th car by 2018. They just have to come up with the money to pull it off.
Ramping up the production schedule means Tesla will have to ditch its plans to be cashflow positive by the end of this year. Although the electric car company reported losing $282 million on $1.15 billion in revenue in the first quarter of 2016, the financial report suggests stability over the previous quarter, and lines up with analysts’ expectations. The company’s leadership seems to believe in that old adage about spending money to make money, saying that “investing to meet that demand is the best long-term decision for Tesla.”
Related: Tesla unveils $35k Model 3 electric car for the masses with a 215-mile range
When Tesla opened up pre-orders on the Model 3, some 375,000 people signed up in the first two weeks. Tesla originally planned to start production on the Model 3 about 18 months from now, but the incredible demand inspired company leaders to rethink those plans. Still, Tesla says it will need “some additional capital” in order build its 500,000th car by 2018, without offering details about what that means.
To increase production rates, Tesla made major factory upgrades in 2014, adding a fleet of robots which are named after X-Men characters. The time needed for many processes was cut in half thanks to that renovation. This week, Tesla announced it plans to end the second quarter of 2016 cranking out a staggering 2,000 vehicles a week, indicating the half-million marker is a serious goal.
Via The Verge
Images via Tesla Motors