Tesla’s operating cost and R&D spending increased in 2015 Q2

Tesla’s operating cost and R&D spending increased in 2015 Q2

Electric vehicle manufacturer has reported that its operating costs and research and development (R&D) expenditure witnessed an increase during the 2015 second quarter; and the company reportedly burned $359 million in cash in the luxury-vehicle market.

Due to the increased operating costs and R&D spending, Tesla had only $1.15 billion on hand, as of June 30, 2015. In comparison, at the same time last year, the company had $2.67 billion on hand.

With Tesla losing more than $4,000 on every Model S electric sedan, the company said in a Wednesday statement that it has cut its production targets for 2015 and 2016. In addition, Tesla CEO Elon Musk also said that he is mulling different options – including the sale of more stock - for raising more capital.

Tesla has also hinted that its capital spending will fall in 2016, because it does not plan to spend on any major vehicle launch in that year. The company will launch its Model 3 lineup in 2017. The cost of that vehicle will begin at approximately $35,000; and will likely push Tesla’s total sales toward its production target of 500,000 vehicles per year by 2020.

However, in disagreement with Tesla that the company’s capital spending will drop over the next two years, Barclays analyst Brian Johnson has projected that Tesla's capital spending will increase in 2016 and 2017 as the company ramps up its battery plant and Model 3 development.

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