By Mike Ramsey And Colum Murphy
Tesla Motors Inc. Chief Executive Elon Musk told an auto
industry gathering the Silicon Valley auto maker will need until
2020 to be profitable on a basis that includes charges and
executive compensation.
Mr. Musk, making a rare visit to Detroit during the city's
annual auto show, said Tesla's Model 3 will need to be in full
production mode by the end of the decade to meet the profit goal.
The Model 3 is planned as a cheaper and less capable electric car
slotted under the Model S sedan and forthcoming Model X SUV in
Tesla's lineup.
Tesla's shares were down 7.1% in after-hours trading to
$189.70.
The Model 3 is slated for 2017, the same year General Motors Co.
aims to launch its Chevrolet Bolt. Both vehicles are designed to
travel 200 miles on a single charge, and be closer to the $30,000
through $40,000 range. The Model S often sells above $100,000.
The executive, as expected, urged other auto companies to speed
the introductions of electric vehicles. Tesla, currently with
volumes around 35,000, should sell "a few million cars" by
2025.
"The need for sustainable transport is incredibly high," he
said. "Even in the face of massively declining oil prices I think
it only becomes more urgent that the industry advance its
development of electric vehicles. It's really just a question of
when it goes fully electric, and if it goes sooner that will be
good for the world."
To date, Mr. Musk has sold cars directly to consumers, avoiding
the franchising arrangement that nearly all auto makers use. He
told the Automotive News World Congress he would consider dealers
at some point, but he won't work with the dealers who "have been
jerks."
He will go to Texas, meanwhile, to lobby for the ability to make
direct sales. That trip is scheduled for Wednesday.
Mr. Musk earlier Tuesday told The Wall Street Journal sales of
its electric vehicles in China declined significantly in the last
quarter of 2014 largely due to "misperceptions" among Chinese
consumers about charging.
Sales in China, he said "started off being fairly strong...but
in the fourth quarter of last year China was not a significant
contributor to our sales."
He said Tesla has to correct a misperception that a Tesla is to
charge."
He also said the company is working on a list of electric car
brands in China that qualify for special government support and
subsidies. He declined to comment on how talks with the issue was
going, saying they were "sensitive" and that he is "hopeful."
The charging issue was one reason why he replaced Veronica Wu
with Tom Zhu as head of China.
"I put the guy that was in charge of supercharger rollout in
China in charge of China overall because the question of charging
and the perception of charging and making it easy and convenient is
our Number One problem," he said, addressing confusion related to
why he made a change in Chinese leadership. "The guy with the best
expertise in charging needs to be running China for us."
Write to Mike Ramsey at michael.ramsey@wsj.com and Colum Murphy
at colum.murphy@wsj.com
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