Tesla Motors Inc missed fourth-quarter sales targets and analysts' profit expectations, but Chief Executive Officer Elon Musk on Wednesday said by 2025 Tesla's growth trajectory could take its market value to $700 billion, matching that of Apple Inc.
It was a glimmer of optimism capping a difficult quarter that saw the electric-car company struggle with production and delivery issues on several fronts, notably in China.
Investors sent shares down nearly 4 percent in after-hours trade, after Tesla said heavy capital and operating expenses would escalate in 2015.
Expansion of the company's global sales network and development of the new Model X crossover increased operating expenses in the fourth quarter to $336.5 million, from $169.9 million a year ago.
Operating expenses for the year were $1.07 billion and are expected to grow another 45 percent to 50 percent in 2015.
Free cash flow in the quarter was a negative $455.1 million, as cash dwindled to $1.91 billion from $2.37 billion at the end of the third quarter. The company's cash burn next year should be less than $1.0 billion, according to Chief Financial Officer Deepak Ahuja.
Musk told analysts late Wednesday that Tesla should return to positive cash flow in late 2015, but said he did not see the need to raise additional funds "right now."
He countered analysts' question about Tesla's cash position by painting an upbeat picture of the company's long-term prospects.
Musk said Tesla's revenue this year could grow to $6 billion, from $3.2 billion in 2014. His 2025 market-cap prediction assumed 50 percent annual revenue growth and a price-to-equity ratio for the stock of 20.
On Wednesday, Tesla reported a quarterly loss of $107.6 million, or 86 cents per share, compared with a year-ago loss of $16.3 million, or 13 cents per share. Revenue in the quarter climbed to $956.7 million, from $615.2 million a year ago.
On a non-GAAP basis, Tesla said it lost 13 cents a share. Analysts polled by Thomson Reuters had expected a profit of 31 cents.
The California-based maker of luxury electric cars delivered 9,834 Model S sedans in the quarter, well below CEO Musk's earlier forecast of 13,000.
Tesla said it built a record 11,627 cars, boosting total production to 35,000 for the year. But the company delivered only 31,655 and said delays would push some deliveries into the first quarter of 2015.
Sales in North America in 2014 were flat, at about 17,400, or 55 percent of the total. About 9,500 cars were delivered in Europe and about 4,750 to the Asia Pacific region, including China, where sales began last April.
The company expects to deliver about 55,000 cars globally in 2015, an increase of about 74 percent.
Musk said Tesla's $35,000 Model 3 should be in production by the second half of 2017, and that its design will not be as "adventurous" as that of the gullwinged Model X crossover, in order to keep the production schedule on track.
He said Tesla remains "on plan" to begin battery production in 2016 at a $5 billion factory outside Reno, Nevada.
Shares closed down 1.6 percent to $212.80 on Wednesday and dropped another 3.9 percent in after-hours trade to $204.50. Tesla's market cap at close was $26.7 billion.
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