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Tesla loses $50 million in Q1, Model X could be delayed until 2015

Maybe it's just because of our interest in the green automotive sector, but to us, Tesla Motors has got to be the most interesting and exciting company in the US to watch. We get giddy, for instance, over the release of stuff like shareholder letters and financial results, whereas when other companies announce these things, we yawn. Our feelings about today's publication of the California automaker's 2014 first quarter financial results, with accompanying letter and call with financial analysts, is no different. They contained, after all, tons of small news nuggets that help us put together a better picture of how it will move towards its overarching goal of changing the gasoline-powered paradigm. The important numbers released today are $50 million and 7,535. The first is how much the company lost (on a GAAP basis) – using the non-GAAP method that Tesla prefers, it actually saw $17 million in net income – while the second is the number of cars it produced in the first three months of this fiscal year. Though the reported earnings per share of $0.12 exceeded the expectations of many analysts, it was less than some of the more rosier forecasts, and so the stock (TSLA) is taking a beating in the after hours market and has tumbled down 14.5 percent to $186.85 as of this writing. Musk gave instructions to the China team that they "spend money as fast as they can without wasting it." Stock price aside, there is a lot to be happy about. Contrary to some recent reports, Tesla is continuing to see a rise in domestic demand – up 10 percent in the quarter – along with "significant sequential increase in worldwide net orders for Model S." China, the market that could easily become the company's biggest, is also the source of glad tidings with CEO Elon Musk saying he is "blown away" by the level of enthusiasm there. Since getting government approvals, the necessary building out of the Supercharger and Service Center infrastructure needed to support owners is going full speed ahead and Musk gave instructions to the China team that they "spend money as fast as they can without wasting it." Already there is a four-to-five month wait for cars in the country's mid-sized cities, where the work needs to happen, and that has led to some customer frustration.

Michigan gets into anti-Tesla legislation game

If you figured the home of the US car industry would be against messing with the age-old, franchised-dealer auto distribution system, you'd be right. Michigan, home to the Big Three US automotive companies (General Motors, Ford, Chrysler, now Fiat Chrysler), is moving towards officially disallowing companies like Tesla Motors from selling their cars directly to consumers, according to the Wall Street Journal. Tesla will naturally fight this, but it's one more challenge for the California-based automaker. Both chambers of Michigan's legislature approved bills banning automakers from selling cars to the public without doing so through a third-party franchised dealership. Tesla once again will rally against this, arguing that the uniqueness of its electric vehicles prevents third-party dealers from properly marketing the cars. Legislation like this continues to make its way through various states, with varying degrees of approval. Last month, the Georgia Automobile Dealers Association stated its intention to shut down Tesla's one state store and prevent two planned outlets from opening. Texas, New Jersey, Maryland, Virginia and Arizona have also taken a hardline approach to preventing direct automaker-to-public sales. Tesla has worked out compromises in other areas, for example with Pennsylvania in August. There, electric vehicles are now exempted from the franchised-dealer mandate.

Elon Musk hints at need for franchised Tesla dealerships

The auto dealers around the US, the ones who are frantically trying to stop Tesla Motors from selling its cars directly to consumers, might just need to wait things out. The latest state to take an aggressive stance against Telsa's dealer-free policy is Michigan, but in an new interview with Autoline Daily, Tesla CEO Elon Musk said that as the company grows, it may need to introduce franchised dealerships into its sales model. Currently, Tesla only sells vehicles directly to customers through a network of Tesla Stores. But that may not be enough once more vehicles – the Model X and the Model 3 – arrive and demand for the electric vehicles grows in all fifty states. According to Autoline Daily host John McElroy, when he asked Musk about future growth, Musk admitted that, "We may need a hybrid system, with a combination of our own stores and some dealer franchises." That's a big turn around from Musk's previous claims that normal dealerships can't properly sell electric vehicles and that, if necessary, Tesla would try to change the laws nationwide to allow direct sales, a strategy that has had its share of successes, including surprising support from the FTC. Still, selling a few thousand vehicles a month is a lot different than selling tens of thousands, and that's the sort of thing that Tesla's legislative director Jim Chen may have been thinking about when, in a closed-door regulatory meeting in the fall of 2013, he reportedly said that Tesla would stop its factory-direct-only policy once sales increased to some unspecified level, according to Hybrid Cars. You can see the AD video below. The Tesla news is first in the line-up. This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.