Tesla Inc. Chief Executive Officer Elon Musk expects to grow the fleet of Tesla vehicles by 60-80% this year, after doubling it last year.
“It’s hard to be profitable with that level of growth,” Musk said at the company’s annual shareholder meeting in Mountain View, California. “We could slow it down, but then that would not be good for sustainability and the cause of electric vehicles.’’
Tesla has said it expects to deliver 90,000 to 100,000 cars in the second quarter, after doing just 63,000 in the first.
Analysts have questioned whether there is global demand for the hundreds of thousands of Model 3 sedans and other vehicles Tesla aims to produce, after deliveries fell 31% in the first quarter.
Tesla previously said it aimed to deliver 360,000 to 400,000 vehicles in 2019. But ramping production strains finances, and Tesla is increasing output at its U.S. factory, launching production in China, overhauling its U.S. retail and service operations and developing new models.
“It’s hard to be profitable with a high growth rate,” Musk said, expressing confidence that Tesla would be “cash flow positive” despite those challenges.
Tesla lost $702 million in the first quarter and has said profit would be delayed until the latter half of the year.
Musk’s plans include unveiling an electric pickup truck this summer and getting into semi truck production toward the end of next year. He said he hoped to have an investor day on batteries by the end of the year and emphasized that battery production was the key to vehicle production.
“Having to not pay tariffs and have the really long delivery chain and high transport costs will make the cars a lot more affordable to people in Europe and China,” Musk said.
Tesla was likely to settle on a location for a European factory by the end of the year and expects to start selling in India by next year.
Musk also teased that Tesla could get into mining of metals crucial for battery production to further lower costs.
“We’ll do whatever we have to, to ensure that we can scale at the fastest rate possible,” he said.
Noting that electric cars introduced recently still don't have more range than the original Model S when it launched in 2012, Musk said that it won't be long before Tesla offers an electric vehicle capable of going 400 miles between charges.