Tesla’s Musk talks gigafactories, profit at NAIAS

Nate Swanner - Jan 13, 2015, 5:40pm CST
Tesla’s Musk talks gigafactories, profit at NAIAS

Today at the North American International Auto Show in Detroit, Elon Musk sat down to talk all things Tesla. The CEO, who has a contentious relationship with both the auto industry and state of Michigan, opened up about the state of the union at Tesla. He answered questions, and gave a prospectus on where the auto maker was going. As stock fell roughly 6%, Musk explained it away, and further detailed their plans for world domination. Or, just being allowed to sell cars.


Speaking of selling cars, Tesla can’t in Michigan. The reason is a ban on auto manufacturers selling direct to customers. State law states a franchise retailer must serve as a go-between; something Tesla isn’t interested in. Musk said his company is much more concerned with getting their own stores up and running first ahead of allowing franchisees to sell Teslas.

Before considering taking on any franchise dealers, we first need to establish a solid base with our own stores in every region” said Musk.

Tesla isn’t yet selling cars on a grand scale, though. According to Musk, their goal for 2014 was 33,000 sales, which they exceeded. They’re planning to ship the Model X this summer (and say they’ve already sold through their 2015 production run), and the Model 3 — Tesla’s entry level model which could really expand their reach — will likely come out when Tesla is under the gun to turn a profit. When asked when Tesla needs to start making money, Musk said “probably when the Model 3 is in production”.

It sounds like 2020, when Musk says they’ll have half a million cars rolling off the line annually, is a good point for turning a profit, and may suggest we’ll see the Model 3 before then.

Tesla is also more concerned with service centers than they are stores. They’re also focussing heavily on those gigafactories, which are a precursor for ramping up manufacturing elsewhere for Tesla.

With their stock price down, Musk points to a misunderstanding in China as he reason. With sales way down, Musk said there was a misinterpretation regarding charging, which is now resolved, he says.


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