Tesla loses nearly $50M from rising development costs despite producing a record 7,535 Model S sedans in the first quarter and delivering 6,457 units to customers, which was slightly above expectations. According to a report from MSN Money Wednesday, research and development costs jumped 49 percent to $81.5 million as Tesla prepares to launch the Model X crossover in 2015 and adapts the Model S for a growing number of international markets.
The quarterly results were released after the close of stock markets in North America. But after the closure of floor operations, the company's shares fell 7 percent to $187.50.
Tesla said that during the first three months of 2014 its revenues were $713 million, 27% more than in the same period in 2013. The luxury electric car manufacturer said that it expects to produce between 8,500 and 9,000 units in the second quarter with expected sales of 7,500 units. The company also announced that it will invest $850 million this year to allow the expansion of its production capacity.
Tesla, created by billionaire Elon Musk, also confirmed that work will begin to build the gigafactory, a proposed $5 billion battery factory which will produce battery packs for its cars.
Regarding the gigafactory, Forbes reports that Tesla said, in a letter sent to investors of the company along with the financial results, that although the company has not decided the final location for the factory, they will break ground in June on the first of at least two gigafactory locations, and it may launch the second one shortly afterward.
“As we grow globally, we are also expanding our vehicle portfolio. Our addressable market will increase with the launch of the right hand drive Model S in the United Kingdom next month, and in Japan and Hong Kong later this summer,” an excerpt from the letter read.