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Weekly Recap: The cost of Tesla's ambitious plans for growth

Tesla has ambitious plans for growth, and they won't come cheap. The electric-car maker said this week it plans to spend $1.5 billion in 2015 to expand production capacity, launch the Model X crossover and continue work on its Gigafactory, which is being built outside of Reno, NV. The company is also investing in its stores, service centers and charging network, which is expected to grow by more than 50 percent this year. Plus, it's still working on the Model 3, which is scheduled to arrive in 2017. "We're going to spend staggering amounts of money on [capital expenditures]," Tesla chairman and CEO Elon Musk said on an investor call. He then added: "For a good reason. And with a great ROI [return on investment]." They're bold plans, and Musk is clearly willing to put Tesla's money where his mouth is. That's why the company is projecting a whopping 70-percent increase in deliveries this year, for a total of 55,000 cars. A large chunk of that growth will come from the addition of the Model X crossover to Tesla's portfolio, and the company already has nearly 20,000 reservations for it. More than 30 Model X prototypes have been built, and it is expected to begin shipping to customers this summer. Musk said he's "highly confident" the vehicle, which has experienced delays, will arrive on time. The company also had more than 10,000 orders for the Model S at the start of the year. The big spending plans caused a stir, even though Tesla spent $369 million on capital expenditures in the fourth quarter alone. In a note to investors, Morgan Stanley analysts called the costs required to keep pace with Tesla's demand "eye-wateringly high," and said the $1.5-billion figure was nearly double their expectations. Still, Musk is not thinking small and suggested that his company could be as big in 10 years as Apple is now if Tesla's growth continues. His optimism comes as the company actually reported a $294-million net loss in 2014, more than its $74-million loss in 2013. The money, however, continues to roll in, and total revenues increased to $3.2 billion in 2014, up from $2 billion in 2013 and a dramatic surge from $413 million in 2012. More of the same is expected this year, and the company could reach $6 billion in revenue. As Morgan Stanley noted, it "seems Tesla is preparing to be a much larger company than we have forecasted." It's certainly spending that way.

Foreign automakers pay from $38 to $65 per hour to non-union workers

As leaders for the United Auto Workers gather in Detroit for their Special Convention on Collective Bargaining to work out the negotiating stance for this year's new labor agreements with the Detroit 3 automakers, what they most want to do is figure out how to eliminate the two-tier wage scale. However, the lower Tier 2 wage has allowed the domestic automakers to reduce their labor costs, hire more workers, and compete better with their import competition. As it stands, per-hour labor rates including benefits are $58 at General Motors, $57 at Ford, and $48 at Fiat-Chrysler – a reflection of FCA's much greater number of Tier 2 workers. The Center for Automotive Research released a study of labor rates (including benefits) that put numbers to what the imports pay: Mercedes-Benz pays the most, at an average of $65 per hour, Volkswagen pays the least, at $38 per hour, and BMW is just a hair above that at $39 per hour. Among the Detroit competitors, Honda workers earn an average of $49 per hour, at Toyota it's $48 per hour, Nissan is $42 per hour, and Hyundai-Kia pays $41 per hour. The lower import wages are aided by their greater use of temporary workers compared to the domestics. Automotive News says the ten-dollar gap between those foreign camakers and the domestics turns out to about an extra $250 per car in labor, which adds up quickly when you're pumping out many millions of cars. That $250-per-car number is one that, come negotiating time, the Detroit 3 will want to reduce, as the UAW is trying to raise both Tier 1 and Tier 2 wages. Another wrinkle is that the domestic carmakers are considering the wide adoption of a third wage level lower than Tier 2. Some workers who do minor tasks like assembling parts trays kits and battery packs already make less than Tier 2, but the UAW will be quite wary about cementing yet another wage scale at the bottom of the system while it's trying to fight a bigger battle at the top. News Source: Automotive News - sub. req., BloombergImage Credit: AP Photo/Erik Schelzig Earnings/Financials UAW/Unions BMW Chevrolet Fiat Ford GM Honda Hyundai Kia Mercedes-Benz Nissan Toyota Volkswagen labor wages collective bargaining labor costs

A look inside Infiniti's variable-compression engine

We're sympathetic to anyone who had trouble understanding what's going on with Infiniti's new variable-compression engine. While we got a full tech briefing on the novel VC-Turbo back in August, the visual aids were lacking. The cutaway engine Infiniti brought to the Paris show fixes all of that. You can thank the little green and pink lines on the cutaway for making the whole idea a little more clear. Click through the gallery to see two lines – one green and one pink – that represent the different strokes allowing for different compression ratios. Remember, the compression ratio is the amount of volume in the cylinder on intake compared to the amount at the end of the compression stroke. Leave more room at the end and you lower that ratio. The length of the stroke doesn't change with this system, but where it sits along the cylinder does. Hence those two lines. The variable compression ratio allows this new turbocharged engine to maximize fuel economy when the turbo isn't needed by raising the compression ratio. It will see its first use in the next Infiniti QX50 crossover, previewed by the QX Sport Inspiration concept that's also on display in Paris, and has performance targets of 268 horsepower and 288 pound-feet of torque. After, it will migrate to other Infiniti and Nissan vehicles, with transverse front-drive-based applications first in line. Eventually, it's likely to completely replace Nissan's corporate 3.5-liter V6. We'll be poking around the engine a little more in Paris today to try and get some more info. For now, enjoy those cutaway images and those friendly little lines. Featured Gallery Infiniti VC-Turbo engine cutaway View 14 Photos Paris Motor Show Infiniti Nissan Technology Emerging Technologies engine 2016 paris motor show