Tesla loss passes $38 million in 2nd quarter

Tesla Motors Inc., the electric-car maker backed by Toyota Motor Corp. and Daimler AG, said its second-quarter loss widened to $38.5 million in its first earnings release as a publicly traded company.

The net loss of $5.04 per share widened from $10.9 million ($1.56) a year earlier, the Palo Alto company said Wednesday in a statement. Revenue rose 5.4 percent to $28.4 million.

Chief Executive Officer Elon Musk's startup, unprofitable every year since its founding in 2003, has said the losses will continue until production and sales of its $57,000 Model S start in 2012.

The company named after inventor Nikola Tesla is using funds from an initial public offering that raised $260 million in June, more than $324 million from private investment and $465 million in low-cost federal loans to get the Model S rechargeable sedan into production at a former Toyota joint venture plant.

So far, development costs are within Tesla's $400 million budget for the car, Musk said this week in an interview with Bloomberg Television.

"In terms of supply chain deals we're doing, in terms of costs of development, it's tracking to our expectations," he said in Hawthorne (Los Angeles County). "Accept the possibility that every now and again there's going to be an exception to the rule. In this case, it's Tesla."

Despite its losses, Tesla has renewed interest in cars powered by electricity rather than petroleum. Late this year, Tesla's $109,000 Roadster will be joined by rechargeable cars from Nissan Motor Co. and General Motors Co., with more to follow from other automakers.

The cost to produce Model S and other electric vehicles will eventually be too much for Tesla, said Eric Noble, president of the Car Lab, an automotive consulting company in Orange. Musk should plan for costs of $1 billion, or more than twice the current target, he said.

"It's certain that the $250 million they've recently raised in an IPO, they'll go through at least that," Noble said. "Then probably that again, and twice again before Model S comes to market."

Toyota bought a $50 million stake in Tesla last month and Daimler, maker of Mercedes-Benz autos, has invested about $57 million. Tesla is supplying lithium-ion battery packs for Daimler's Smart minicars and last month said it's developing RAV4 electric sport-utility vehicles for Toyota.

Tesla fell 69 cents, or 3.1 percent, to $21.26 on Wednesday. The shares have risen 25 percent since the offering.