US electric carmaker Tesla Motors is one of those companies that the media, public, analysts and investors all watch and dissect after it established itself from a slow selling startup into an innovative auto industry player.
According to some of the automaker’s watchers, the California-based producer of luxury electric cars today relies too much on government subsidies, with total gains of more than $300 million since 2011, according to the Wall Street Journal Europe. “Why does Tesla, which is already valued at about $27 billion (on the stock market), still need so much taxpayer welfare,” the newspaper asked. Last week Tesla reported net loss that jumped from $74 million in 2013 to $294 million last year, even though sales jumped 59 percent to $3.2 billion. Tesla also manufactured 35,000 units and plans to lift production to 55,000 vehicles this year as it introduces a second nameplate – the Model X Crossover.
Investors are also contemplating Tesla’s ambitious plans that were shown after the financial results – with CEO Elon Musk among others vying for a market capitalization of $700 billion, the size of Apple Inc. today, by 2025. The Wall Street Journal added that Tesla’s order books would have bled even further if it had not been for the $86 million in profits from the sale of government emission credits. The US credits come from federal fuel-efficiency regulations and state zero emission vehicle (ZEV) mandates and the automaker capitalizes on the excess credits by selling them to automaker which fail to meet a certain threshold.