Tesla Motors Is Losing $4,000 On Every Purchased Model S

Tesla Model S Loses 4000 dollars per sale

The Tesla Model S is increasing sales year-over-year but that doesn’t mean the company is reaping massive profits from its growing luxury vehicle output. According to Business Insider, the company is losing $4,000 per sedan or $359 million last quarter. CEO Elon Musk has said the company is examining the possibility of raising more capital, possibly through a stock sale.

The company is hoping to jump from one low-volume vehicle to several models by Q1 2016. Musk is also expanding a venture to manufacture electric-power-storage systems.

On Thursday Tesla’s shares dipped by 9% and then fell by another 2% on Friday. Tesla had just $1.15 billion on hand as of June 30, compared to  2.67 billion a year earlier.

At current market rates, a vehicle manufacturer easily spends $1 billion to bring a new car to market. While Tesla has $1 billion on hand, competitors such as General Motors and Ford will typically have $20 to $30 billion in cash reserves.

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General Motors sells 9 million vehicles per year, while Musk and company are aiming for a high of 55,000 vehicles in 2015.

In the second quarter of 2015 Tesla delivered 11,532 cars at an operating loss of $47 million.

The company is planning to use $1.5 billion in capital spending this year to launch the Tesla Model X, a high-powered, battery-operated sport-utility vehicle.

Written by Peter Mondrose

Peter Mondrose

Peter Mondrose is the Editor-In-Chief at BusinessPundit. He received his degree in Economics in 1998 and a second degree in Journalism in 2004. He has served as a financial adviser, market trader, and freelance journalist for the last 11 years. When he's not investigating market conditions and reporting on workplace news, he can be found traveling with his wife, dog, and laptop. He can be reached at PeterMondrose@BusinessPundit.com or (929) 265-0240.