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 Speaking at an industry conference in Detroit, Musk said Tesla may
not be profitable until 2020. In addition, Tesla sales in China were
unexpectedly weak in the fourth quarter. He blamed a misperception
by city-dwelling Chinese consumers that they might have difficulty
charging their electric cars.
"We’ll fix the China issue and be in pretty good shape probably in
the middle of the year," he said.
Tesla shares fell 7 percent in after-hours trade to $190.22 from a
close of $204.25 on the Nasdaq. During 2014, Tesla stock rose nearly
48 percent.
Musk, who last year said Tesla will begin phasing in "autopilot"
features on its Model S sedan, predicted that the company will be
first to market with a fully self-driving car, but likely not until
after 2020. While Tesla may have a driverless car ready in five
years, the vehicles may not receive regulatory approval for another
two to three years after that, he said.
Musk also said the company's long-delayed Model X sport utility
vehicle will be launched this summer, while the lower-priced,
higher-volume Model 3 is on track for a 2017 introduction.
The Model 3 will be critical to Tesla's goal of reaching an annual
sales level of 500,000 vehicles a year by 2020, a target which Musk
also reaffirmed.
If Tesla hits its target of a few million vehicles by 2025, it would
put the company on par with Fiat Chrysler Automobiles <FCAU.N>,
which sold 2 million vehicles last year in the United States.
Musk said Tesla likely would not achieve profitability using
generally accepted accounting principles until the Model 3 ramps up
to full production in 2020, although it may report non-GAAP profits
before then as sales volume rises.
Musk told attendees at the Automotive News World Congress that "we
could make money now if we weren't investing" in new technology and
vehicles such as the Model 3 and expanded retail networks, Musk
said.
On another topic, Musk said he was open to partnerships with
retailers to sell Tesla vehicles, but not until after the company no
longer has production bottlenecks.
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"Before considering taking on franchised dealers, we also have to
establish (more of) our own stores," he said. Musk said "we will
consider" franchising "if we find the right partner." He did not
elaborate, but said Tesla "is not actively seeking any partnerships"
with other manufacturers "because our focus is so heavily on
improving our production" in Fremont.
Last year, Tesla delivered about 33,000 Model S sedans. Musk said
the current wait for delivery is one to four months. Tesla already
has presold every Model S that it plans to build in 2015, Musk said.
He said he did not see the Chevrolet Bolt, a low-priced electric car
planned by General Motors Co <GM.N> for 2017, as a potential
competitor to he Model 3.
"It's not going to affect us if someone builds a few hundred
thousand vehicles," he said in reference to the Bolt, which GM
expects to price to compete directly with the Model 3.
But "I'd be pleased to see other manufacturers make electric cars,"
he said.
(Additional reporting by Bernie Woodall; Editing by Matthew Lewis
and Lisa Shumaker)
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