Elon Musk’s Tesla Motors and SolarCity delivered awful earnings reports this week, but the entrepreneur is promising his ventures will actually start to make money in 2016.
Tesla reported a loss of $320.4 million Wednesday afternoon, or 87 cents per share, well above expected losses of 10 cents per share. For the entire year Tesla lost a total of $889 million, more than tripling its 2014 losses of $294 million, reports The Wall Street Journal.
“I feel very good about things right now,” Musk said in a conference call following the earnings release. “The last several months have been quite excruciating, really.”
Tesla has been hemorrhaging roughly $400 million a quarter for over a year trying to meet deadlines and expectations for the Model X SUV released last fall. The company only delivered 206 Model X vehicles in the fourth quarter of 2015, however Musk says this was intentional so technology could be improved.
In the call Thursday Musk reassured investors deliveries and production are going to vastly increase this year and promised the company will finally start to turn profits by the final quarter. Tesla expects to produce up to 90,000 vehicles this year, which would mark a roughly 80 percent increase in output from 2015.
“For 2016, we are planning for even faster delivery growth than last year,” read the earnings statement from Tesla. “We plan to be net cash flow positive and achieve non-GAAP profitability for the year.”
Shares of SolarCity, Musk’s foray into renewable energy, are getting shellacked this year. Shares plummeted from January highs of $52 to $17.14 per share, sinking the worth of Musk’s majority stake by roughly $680 million. In its fourth quarter earnings report released Tuesday afternoon, SolarCity reported a loss of $2.37 per share, reports USA Today.
SolarCity CEO Lyndon Rive says he expects the company to grow 40 percent in 2016 and generate profits for the first time, despite sinking shares. When pressed by analysts on how it will achieve this, no potential catalyst for growth was given.
Musk’s companies, which include Tesla, SolarCity and Space X, rely heavily on government subsidies to survive. Tesla and SolarCity have yet to generate positive profit earnings on an annual basis. Combined, Musk’s companies have benefited from roughly $4.9 billion in government subsidies, according to The Los Angeles Times.
Despite all the bad news concerning company financials, Tesla’s stock managed to gain 7 percent in trading Thursday. A major factor was additional information Musk provided on the Tesla Model 3, the low-cost alternative to Tesla’s very expensive counterparts.
The vehicle is expected to cost $35,000 and Musk will unveil a prototype March 31. Tesla says it will drive 200 miles on a single charge. When factoring in environmental subsidies and credits customers may be able to purchase one for as little as $25,000.
Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact email@example.com.