Home Technology Tesla Motors Inc CEO On Weak China Sales, Model X, Bolt, Profitability

Tesla Motors Inc CEO On Weak China Sales, Model X, Bolt, Profitability

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Tesla Motors CEO Elon Musk acknowledged that in China, sales of the Model S were “unexpectedly weak” during the fourth quarter but also promised the audience in Detroit that the company is trying to overcome the issue.

Tesla to be GAAP-profitable by 2020

Musk did not give deep insight into the problems prevalent in China which are taking toll on the sales. For the weak sales, Musk blamed a confusion regarding the difficulty in charging their electric cars among city-dwelling Chinese consumers.

“We’ll fix the China issue and be in pretty good shape probably in the middle of the year,” he said.

Musk also spilled the beans on the long-awaited Model X sports utility vehicle, suggesting it will be launched this summer. The Model X’s sales numbers will be a significant driver of Tesla’s goal of reaching an annual sales level of 500,000 vehicles a year by 2020.

Also Musk said during the Automotive News World Congress that the “green” car market should run into profits by 2020, adding that he expects sales to be in the millions by 2025. “We could make money now if we weren’t investing” in new models and expanding retail networks, Musk said. The Tesla CEO said the company will not post a profit as per generally accepted accounting principles (GAAP) until the Model 3 starts being churned out in full swing by 2020.

If Tesla Motors is able to achieve a few million vehicles by 2025, it will be on par with Fiat Chrysler Automobiles, which sold 2 million vehicles last year in the United States, according to Reuters.

Bolt not a competitor for Model 3

On the low-priced electric car from General Motors, the Tesla CEO said the Chevrolet Bolt is not a competitor for the Model 3. He said it will not pressure Tesla if someone builds a few hundred thousand vehicles, referring to the Bolt, which, according to GM, will compete directly with the Model 3.

“I’d be pleased to see other manufacturers make electric cars,” he said, however.

The Tesla CEO also said the company is working toward making its first fully self-driving car, but that will not be possible until after 2020. The EV manufacturer could make a fully automotive driver-less car in another five years, but it would take two to three years from then to get regulatory approval, according to Musk.

Last year, Tesla Motors sold around 33,000 Model S sedans, and the current wait for buyers is one to four months, according to Musk. The company has already presold each unit it plans to manufacture in 2015, said Musk.

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Personal Finance Writer

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