Despite the tepid economic recovery, car makers have reported higher sales, especially for electric vehicles and hybrids. Recently, General Motors (NYSE: GM) saw its revenues increase more than 100% as production got back on track after the Japanese crisis and also as demand for its hybrid, the Cruze, surged.
And then there's Tesla (Nasdaq: TSLA), which doubled its second-quarter revenues but saw its losses increase on higher research-and-development costs. Those higher losses sent shareholders to the selling table, and the stock closed off 9%.
A look at the numbers
Revenues for the quarter more than doubled to $58.2 million from $28.4 million last year, up a staggering 105% as the Roadster enjoyed increased demand around the world. The model fetched $27 million in the last quarter with 190 units delivered.
However, Tesla's costs shot up to $74.8 million from $37.6 million, an increase of 105% from last year. The company spent more on R&D and hiring this quarter as it works on developing a number of new vehicles.
Those higher R&D expenses resulted in an increased loss of $58.9 million and a larger operating loss of $56.3 million, up from $38.5 million and $31.4 million, respectively, last year.
Up the road
Tesla recently struck a $100 million deal with Toyota (NYSE: TM) to help provide powertrain systems for the Japanese auto giant's RAV4 SUV model. The deal is expected to rake in close to $169 million in revenues, with production slated to begin next year and roll on until 2014. Meanwhile, Tesla has invested heavily in its Model S sedan and expects the cars to hit the road by mid-2012. It has also started developing the Model X Crossover and plans to produce nearly 15,000 in 2014. These initiatives should add to revenues in the long run.
The Foolish bottom line
Even though earnings dropped this quarter, I expect good things from Tesla. Its new models and the tie-in with Toyota should rev up its top and bottom lines in the long run. Investors should take note.
