MONEY Autos

Tesla Broke the Consumer Reports Rating System

Yes, we're serious. Apparently, it's that good.

The new Tesla Model S P85D broke the Consumer Reports rating system by scoring 103 out of 100. Consumer Reports said it had to overhaul its rating system to accommodate the P85D’s combination of performance and efficiency. The model can go from zero to 60 in 3.5 seconds without using a single drop of gasoline. It gets the equivalent of 87 miles per gallon without sacrificing any horsepower. Despite the better-than-perfect score, the Tesla isn’t a better-than-perfect car. “The interior materials aren’t as opulent as other high-ticket automobiles, and its ride is firmer and louder than our base Model S,” Consumer Reports reported.

MONEY Opinion

Self-Driving Cars Won’t Arrive Anytime Soon

US-BRAZIL-DIPLOMCY
JOSH EDELSON—AFP/Getty Images Brazil's President Dilma Rousseff takes a ride in a self-driving car at Google headquarters in Mountain View, California on Wednesday, July 01, 2015.

To reap the benefits of a driverless future, most cars on the road will need self-driving capabilities and be able to communicate with each other.

There’s no question that the idea of an autonomous or “self-driving” car has a great deal of appeal. There’s also no question that a world in which most of the vehicles on the roads are automated will be safer and more efficient than today’s jammed highways.

But when is that world coming? Some tech enthusiasts would have us believe that a self-driving future is just around the corner. But investors hoping to ride this trend should consider the possibility that it will be many years before the idealized self-driving future will be a reality.

The future vision is compelling
When people talk about the promise autonomous or “self-driving” cars, they generally mean vehicles that both drive themselves and communicate with the other vehicles and infrastructure around them.

Once the roads are flooded with these vehicles, the argument goes, accidents and traffic jams will be greatly reduced — and travel by car will be safer, swifter, and more pleasant.

That all sounds true to me. Companies (and regulators) are already working hard to bring about that future. But there’s a catch: To get all of the great benefits, most of the cars on the road have to have self-driving (and intercommunication) capabilities.

That’s why I think that a fully self-driving future is probably still a long way off, even though self driving cars are already heading to market.

Self-driving cars are already emerging …
It’s possible to argue that the first self-driving car has already arrived — but only for an extremely limited definition of “self-driving.”

Daimler‘s DAIMLER AG DDAIF 0.32% Mercedes-Benz already has an extremely limited self-driving feature available on a couple of models: It can take the wheel in stop-and-go highway traffic. But it only works up to 37 miles per hour, and it doesn’t work when you’re not bumper-to-bumper on a clearly marked highway.

General Motors, Tesla Motors TESLA MOTORS INC. TSLA 3.8% , and a few other automakers are expected to release similar systems over the next 18 months or so. In fact, Tesla has promised that a software update for existing Model S sedans will enable some limited self-driving abilities in the near future, possibly before the end of 2015.

For now, these first systems will mostly be gadgets in expensive luxury cars. Think of them as increasingly smart versions of cruise control rather than as robots that can drive your car.

But the expectation is that these systems will get more sophisticated over time, and automakers will gradually add them to mainstream models as costs come down. Meanwhile, the U.S. government is already working on standards for vehicle-to-vehicle and vehicle-to-infrastructure communications, and a few automakers — again, starting with luxury brands — are rolling out some very limited capabilities.

… but a self-driving future is still many years away
I’ve talked to several auto-industry executives about the likely timeline for self-driving cars. All agree that fully self-driving vehicles won’t be available for a while yet. That’s partly because the government is still figuring out the rules for such vehicles, and partly because the technology still has to overcome some big technical challenges: For instance, rain can be very confusing to a self-driving car’s sensors.

These executives say that while many manufacturers have promised self-driving cars by 2020, it’s likely to be several years after that before true, fully self-driving vehicles are available to the mass market.

But even if those cars were to hit the market tomorrow, there’s another reason it’ll take a long time before that utopian self-driving future emerges: It’s what the auto industry calls “replacement rate.”

Here’s the key figure: The average vehicle on U.S. roads today is over 11 years old. Vehicles built today are much more durable and reliable than the vehicles of 20 or 30 years ago. People (and businesses, and governments) are keeping them longer.

It’s possible that most every new car on the U.S. market will have self-driving capabilities within a decade. But even if that happens, it’s likely that it will takeanother decade before most of the cars on U.S. roads have that ability.

That is, unless some sort of big disruption happens.

Even the Apple Car won’t change that
The alternative view is that the emergence of self-driving technology leads to a sudden move away from the idea of private car ownership. Instead of dealing with the hassles of owning (and driving, and parking, and fixing, and insuring) cars, people will opt to subscribe to an automated car service that can take them wherever they need to go, without the hassles.

I think it’s likely that Apple (among others) is looking to create such a service. There has been a lot of speculation about an Apple car, but I don’t think Apple wants to enter the auto business. I think the company is exploring the idea of creating a premium car service using automated electric cars.

Uber is also believed to be working on such a service, and it’s a safe bet that other companies are as well. But even if that alternative vision is the one that prevails, it’ll almost certainly be many years before it spreads beyond the city environments where Uber is succeeding with human drivers now. And in the meantime, people outside those cities will still be buying (and probably driving, at least part of the time) familiar-looking cars and trucks from the established automakers.

Either way, that self-driving future is more than just a few years away.

John Rosevear owns shares of Apple and General Motors.

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TIME Tesla

This Tesla Car Just Scored Consumer Reports’ Highest-ever Rating

Inside The 2015 North American International Auto Show (NAIAS)
Bloomberg—Bloomberg via Getty Images A Tesla Model S P85D.

103 out of 100 ain’t bad

Tesla’s new car is so good that it’s literally off the charts.

The company’s Model S P85D scored a 103 out of 100 from Consumer Reports, the highest score ever given to a vehicle by the publication.

“This is a car that set new benchmarks, and we had to make changes to our scoring to account for it,” Consumer Reports said in a video. The final, official score for the car was 100 out of 100.

The magazine touted the new Model S’s safety features, over-the-air updates and fuel efficiency in its extremely positive review. The standout feature of the P85D version, though, is the new “Insane Mode,” which lets the car accelerate from 0 to 60 miles per hour in 3.5 seconds, making it the fastest vehicle Consumer Reports has ever tested.

Creating a car that’s the best of the best comes at a high cost, though. At a retail price of nearly $128,000, the Model S P85D is also the most expensive car Consumer Reports has ever reviewed.

TIME Business

Elon Musk Could Be the Next Henry Ford

Elon Musk at the Allen & Company Sun Valley Conference in Sun Valley, Idaho on July 7, 2015.
Scott Olson—Getty Images Elon Musk at the Allen & Company Sun Valley Conference in Sun Valley, Idaho on July 7, 2015.

Can Tesla revolutionize the world by making an affordable electric car for the masses, much the way Ford did with the Model T?

The share price of Tesla Motors shot up this week after a financial analyst said that the electric vehicle maker is “uniquely positioned to dominate” the auto industry.

Is Tesla, with its tightly integrated supply chain, following the strategy of another one-time dominant automaker – the Ford Motor Company – of more than 100 years ago? Can it revolutionize the world by making an affordable electric car for the masses, much the way Henry Ford did with the Model T in 1908?

Henry Ford took control of his supply chain and made his own parts rather than buy from suppliers, which gave the company the scale needed to improve performance and lower costs. Now Musk is building a new “giga” battery factory, giving Tesla more control over this strategic component. Will it work out the same as it did for Ford?

Putting Ford in the black

In his 1926 book, Today and Tomorrow, Ford claimed his integrated approach was the key to his success (“if you want it done right, do it yourself”). In fact, he claimed to mine iron ore in Minnesota, ship it to the famous River Rouge facility in Detroit and have it sitting as a Model T in a Chicago driveway in 84 hours! However, at the time, complete standardization (yes, Ford is said to have stated “You could have any color you wanted as long as it was black”) was necessary to make this happen. No options were available as they are for today’s cars, but standardization led to lower prices.

Prior to the Model T, the typical car’s sticker price would often hit $2,000, or almost five years of wages, which put cars out of reach for all but the rich. Working to make his car affordable, Ford sold the Model T for $260 by 1926, leading to massive market share – more than 50% of the automobiles on the road worldwide were Ford’s.

Ford also paid his workers a startling $5 per day to reduce employee turnover.

By this time the average working household income had reached about $1,300 per year. That put the Model T at two to four months of a typical factory worker’s wages, something comparable to or less than today’s economy car!

Huxley’s Brave New World and Fordism

Ford’s significance can even be seen in Aldous Huxley’s classic futuristic science fiction work Brave New World from 1932. Huxley anticipated a world with intercontinental rocket plane travel and TV networks, in vitro fertilization, cloning and genetic engineering. Huxley also saw Ford’s approach to be so central to the future that Fordism – Ford’s system of mass production – would become the primary religion!

Huxley correctly saw so many things to come, yet clearly we don’t all worship Henry Ford today. So why did this prediction not come true? Maybe it is because not long after the book was written, the growing design complexity of cars and the demands of customers made Ford’s black-only Model T no longer competitive.

To offer multiple lines of vehicles and options, Ford’s integrated supply chain had to be broken into separate companies supplying specialized sets of products. No one company could handle it all.

Yet by the 1980s, local area networks meant computers could autonomously control machines and make multiple products from the same facility at relatively low costs. Then in the 1990s, the Internet made physical proximity unnecessary for achieving economies of scale since manufacturers didn’t need to control every component in the supply chain.

What Huxley missed, in other words, was the impact of computers and IT innovations, considered one of the key facilitators to modern supply chain management.

What can Musk learn from Ford?

Let’s roll the clock ahead 100 years. Elon Musk and Tesla Motors are looking to bring the electric car to the masses much the way Ford did with the Model T.

Parallels include decisions to build a “giga” factory to make batteries that are currently sourced from Panasonic in Japan, paying a premium wage to workers to reduce turnover, and planning to make an electric vehicle priced for the mass market – the upcoming Model 3.

Even model names – Tesla sells the Model S and soon the Model X – may be more than coincidental. Will it work for Tesla the way it worked for Ford? Does today’s technology allow Tesla to do even more than Ford?

The battery pack is the single most important and expensive component in an electric car. A battery can exceed $15,000 per vehicle (or $500 per kilowatt-hour of capacity). The Nissan Leaf electric car has a 24 kilowatt-hour battery and has an average range of 84 miles.

Some industry experts believe batteries need to cost about $100 per kilowatt-hour and have almost triple the current range to be truly mass market. Achieving that sort of reduction in cost and improvement in performance comes from manufacturing at greater scale, rather than relying to suppliers.

In other words, as Tesla makes more batteries, it gains more opportunities to refine production and product design.

Ford found that out, and Tesla will as well. It plans to use most of the “giga” factory capacity in Reno, Nevada to supply Tesla’s auto assembly plant in Fremont, California, but also make batteries for utilities, homes and businesses.

Because there are common battery designs and production, Tesla will be able to transfer any product and process improvements between batteries for vehicles and the grid. Tesla estimates that they will reduce battery costs by over 30% with the “giga” factory.

Claims that Tesla with pay an average of $25 per hour in Reno have not been confirmed by the company, but the ability to retain high-caliber workers is necessary to leverage the accelerated experience that comes from scale into lower costs and improved design. Ford demonstrated that a long time ago. Tesla appears to have learned that lesson.

What will it take to be the Next Model T (or Model 3!)?

Musk’s public goal of 500,000 cars per year and a $35,000 price tag on the Model 3 will need every bit of output and resulting innovation the “giga” factory creates. Ford’s limitations in communicating along his supply chain meant very little variation in what was done or how things were done.

Today, models for left-side driving, back seats big enough for customers who want a chauffeur, a third row of seats, four doors, two doors add volume but unfortunately bring complexity as well. Today’s computer-controlled process technology makes design variety much more scalable than in 1920. Research and practice show that now, the ability to collaborate with others (within or outside of Tesla) makes physical proximity moot as well.

Unlike Ford, Tesla can use a global supply chain to make a wide variety of products while still pursuing the cost benefits of large-scale manufacturing. At the same time, Tesla can focus on making in-house “core” components, like batteries, with high learning and innovation potential.

Henry Ford had to control it all because even a missing hubcap could stop the line. Musk can now choose to outsource the more commodity-like components where the potential for process or product design improvement is small.

Not there yet

Musk has increased production from 10,000 vehicles in 2012 to a projected 50,000 by the end of 2015. However, forecasts and supply issues for a variety of parts (especially batteries) are causing scheduling hiccups, which has made Wall Street anxious.

While the new “giga” factory coming online in the next couple of years (and others like it) may help achieve many of the needed performance and cost objectives, Tesla is not there yet. Here are three things the company needs to remember to achieve its goal of mass-market electric cars:

  • First, keep your eye on the core aspects of your business that define your competitive strategy. Tesla making their own batteries fits their strategy of a high-performance, low-cost electric car for the masses. Accumulating experience here moves them toward both volume and cost goals. These are both defined criteria necessary and sufficient for strategic success.
  • Second, avoid allocating resources to noncore aspects because the payback is not there. Shortages or failures in hubcaps or trunk carpeting are as much problems now for Tesla as for Ford. But you can outsource to supply chain partners far more easily now than then.
  • Finally, new products or variations of existing ones should be consistent with maintaining your core competency. That is the key to transferring innovation. If adding scale through color choices or design combinations can add to accumulated experience in the core areas without unnecessarily adding to the burden of complexity, great!

Ford’s view on color choice is no longer relevant. But Tesla’s Musk can still learn from Henry Ford’s strategy of making strategic components. Making batteries for home and business can help Tesla fuel more innovations in car batteries and vice versa.

This article originally appeared on The ConversationThe Conversation

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

MONEY stocks

Why Elon Musk Is Buying $20 Million in Tesla Stock

<> on July 7, 2015 in Sun Valley, Idaho.
Scott Olson—2015 Getty Images Tesla CEO Elon Musk on July 7, 2015 in Sun Valley, Idaho.

The electric-car maker's CEO is still putting his money where is mouth is.

On Thursday, electric car-maker Tesla Motors TESLA MOTORS INC. TSLA 3.8% announced plans to sell $500 million of additional shares in order to raise capital to fund its continuing expansion. The decision to raise capital isn’t a surprise. The company has been burning through its cash at an alarming rate. But just as interesting as the stock offering itself was a key statement tucked in the announcement about one individual planning to buy shares in the offering.

“Elon Musk, Tesla’s CEO, intends to purchase $20 million of common stock in this offering at the public offering price,” the release stated.

Musk’s decision to buy more shares supports his unyielding commitment to being a large shareholder of the company.

Elon Musk’s Tesla stock
“I will be the last one to sell shares,” Musk said in Germany in late 2013 when he was speaking about Tesla’s plans in the region.

Musk’s promise is worth giving some weight. Not only have very few CEOs ever made such a promise, but Musk’s level of ownership in Tesla is quite outstanding. The CEO owns an estimated 27% of Tesla shares, making him the company’s largest shareholder. This is a no-joke portion for a company worth more than $30 billion. So, promising to be the last to sell any shares of a position like this is quite a statement.

This isn’t the first time Musk has invested in a Tesla stock offering. Musk purchased about $100 million worth of shares when the company raised about $450 million through a common stock offering more than two years ago.

Musk’s large position in Tesla stock, and the CEOs decision to buy another $20 million worth of shares is good news for Tesla shareholders. There’s really no way to put a negative spin on a heavily invested CEO.

Famed investor Warren Buffett strongly advocates insider ownership. The first two principles in the Berkshire Hathaway owner’s manual read:

  1. Although our form is corporate, our attitude is partnership.
  2. In line with Berkshire’s owner-orientation, most of our directors have a major portion of their net worth invested in the company. We eat our own cooking.

The offering
The plan to sell $500 million worth of shares of common stock, which will take place in an underwritten registered public offering, also grants underwriters a 30-day option to purchase up to $75 million of additional shares of common stock.

What will the fresh capital be used for?

“Tesla intends to use the net proceeds from this offering to accelerate the growth of its business in the United States and internationally,” the release states, “including the growth of its stores, service centers, Supercharger network, and the Tesla Energy business, and for the development and production of Model 3, the development of the Tesla Gigafactory, and other general corporate purposes.”

This follows the company’s arrangement earlier this year with five banks to open up a $500 million credit line, which has the option of being extended to $750 million. Tesla management said during its second-quarter earnings call it has only tapped into $50 million of this credit line.

Going forward, the company is hoping sales of the Model X will help Tesla become free cash flow positive. According to comments from management during Tesla’s Q2 call, any decision to raise capital would reflect efforts to reduce risk, and wouldn’t represent a move to keep the company from becoming insolvent.

Musk explained the company’s thoughts on cash during the Q2 call:

I don’t think that there’s not a need to raise equity capital. There may be some value in doing so as a risk reduction measure, but to be clear, we — what Deepak is saying is that even in the absence of any additional capital generation activity, we would have on the order of $1 billion through — basically that would be, our minimum cash position.

While the share dilution caused by a $500 million offering is unfortunate, the company has historically proved to investors that management is more than capable of prudently investing capital in growth measures. Since the last Tesla stock offering, sales and gross profit have both more than doubled. Tesla’s vehicle sales soared about 40%, year over year in 2014, and this growth rate has accelerated to about 50% in 2015.

The bonus here, of course, is that Musk is still putting his money where his mouth is. And he’s doing so to a greater extent than the great majority of CEOs of publicly traded companies.

Daniel Sparks owns shares of Tesla Motors.

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TIME Tesla

Elon Musk Is About To Make a Huge Investment in Tesla

Tesla Motors Inc CEO Elon Musk unveils a new all-wheel-drive version of the Model S car in Hawthorne, California
Lucy Nicholson—Reuters Elon Musk

Company is planning to sell millions of shares to expand its business

Electronic car maker Tesla Motors is planning raise about $500 million in September by offering 2.1 million additional shares, according to an SEC filing. Founder and CEO Elon Musk has indicated that he will buy about $20 million worth of the stock.

Tesla will use the proceeds, which could amount to as much as $566 million, to spur development of its Model 3, a more affordable sedan aimed to launch in 2017. The money will also help boost development company’s retail operations, charging stations and battery factory.

Tesla posted a net loss of $184 million in the second quarter, up from $62 million during the same period a year ago. The company has used equity and debt offerings to finance its business, as well as loans from the Energy Department. Musk projects that the company could become profitable on a net basis by 2020 with sales of 500,000 cars per year.

TIME

Here’s How Tesla Plans to Lure More Car Buyers in New York

Christie Appointees Ban N.J. Direct Sales for Musk's Tesla Cars
Bloomberg—Bloomberg via Getty Images

Manhattan parking garages will get high-speed chargers

Telsa has already installed charging stations along long stretches of major highways. On Thursday it plans to put charging locations in a denser environment as a way to appeal to urbanites.

The company will announce that it’s partnering with two dozen parking garages in Manhattan, which will be outfitted with higher-speed, 240-volt chargers so city residents can conveniently power up their electric vehicles, according to The New York Times. It will mark the company’s first entrance into the urban parking garage space.

The parking garage charging stations that will stretch from Wall Street in southern Manhattan up to 94th Street are intended to solve a problem faced by urban Tesla owners: the city’s lack of parking spaces make it difficult to find a spot to reliably charge their cars.

Tesla owners will be able to park in the garages for various periods of time—from an hour to months on end—but unlike Tesla’s highway charging stations, powering up in the garages won’t be free. Garage owners will be able to set charging rates as they see fit.

Separately Thursday, the electric car maker said it plansto raise about $500 million by selling 2.1 million shares. Chief Executive Elon Musk will buy nearly 84,000 shares for about $20 million in the offering, the company said.

MONEY Autos

Can Tesla Build Its Cars as Efficiently as Detroit and Turn a Profit?

Yandex NV Launch Yandex.Taxi Service With Tesla Motors Inc. Electric Vehicles
Bloomberg via Getty Images A Tesla badge sits on the hood of a Tesla S P85D electric vehicle, manufactured by Tesla Motors Inc.

CEO Elon Musk has said his electric car company won't make a profit until 2020.

Tesla Motors TESLA MOTORS INC. TSLA 3.8% has achieved something difficult: It has entered the auto business, credibly, with a great car, the Model S sedan.

That’s a hard thing, and Tesla deserves enormous credit. But manufacturing its car has been another story. Tesla has kept its quality high, but boosts in manufacturing speed have been slow to come despite what the company says is a consistent backlog of orders. And it has encountered delay after delay as it works to add the Model X SUV to its production line.

CEO Elon Musk, citing manufacturing challenges around the Model X, lowered production expectations again this past week.

Tesla is often hailed as a technological leader — but on this front, at least, it’s still well behind the big global automakers. But the investment case for Tesla hangs on the assumption that it will become a profitable mass-market automaker in a few years. Can it catch up to the big automakers’ manufacturing expertise in time to build its upcoming mass-market Model 3 — at a profit?

Manufacturing efficiency is the auto industry’s real “moat”
Designing a great car is hard. Creating an assembly line to build it is also hard. But optimizing that assembly line to build those great cars profitably in the face of fierce, well-funded competition is really hard.

In fact, I argue that manufacturing — profitable manufacturing — is the auto industry’s real “moat”, the thing that fends off new entrants.

First of all, it’s expensive. For a mass-market model, the established automakers might spend $250 million or more just on factory tooling, all of the special dies and equipment needed to manufacture the new model in big quantities for several years.

The high cost of the tooling required to build a car means that the auto business — at least in the mass-market — is a low-profit-margin affair. Modern auto factories are highly optimized to keep costs as low as possible, while delivering the highest possible quality.

Both are critical. Without high quality, an automaker’s products will suffer in the marketplace. But if an automaker’s factory is less efficient than rivals’, it’s at a big disadvantage: It either has to price its car higher, which will hurt sales, or take a smaller profit.

A smaller profit is something a company can ride out for a while. But eventually, in the auto business, it becomes a big problem: With less money to spend on the development of its next models, the automaker starts to fall behind rivals in terms of quality and features as well.

This is how Toyota bridged Detroit’s moat
Toyota TOYOTA MOTOR CO TM 2.87% was able to bridge the established automakers’ moat and become a global giant because it was (and is) exceptionally good at efficient manufacturing. More than anything else, that’s the secret of Toyota’s success.

It’s also the “secret” (one of them, at least) behind the near-death of the Detroit automakers. Toyota and the other Japanese automakers outdid them on quality and manufacturing efficiency, and that nearly put them out of business. (What saved them? They caught up — but only after years and years of effort, and billions of dollars spent.)

If Tesla wants to compete in the mass market, if it wants to build and sell a million or more cars a year, it’s going to have to compete — not on quality, or range, or zero-to-sixty times — but on manufacturing efficiency with the likes of Toyota — and now, Detroit.

Right now, Tesla is far behind the incumbents
Tesla didn’t have a billion dollars to spend on its Model S, and (at least at first) it didn’t expect the sales necessary to support a full-blown production effort that would max out its huge California factory. Instead, the company has been bootstrapping its assembly line, adding tooling gradually to support rising production volumes.

CEO Elon Musk said this past week that the factory would have the ability to build about 1,000 units of the Model S and 1,000 of the Model X per week once Model X production is fully ramped up. In other words, Tesla probably has the necessary tooling to build about 100,000 vehicles a year now.

But it has never come close to that number. It’s not close to producing 100,000 cars a year right now. It built just over 30,000 last year, and Musk said this week that it would produce between 50,000 and 55,000 cars in 2015.

Given that Musk consistently says that Tesla has lots and lots of orders for its cars, manufacturing would appear to be what’s holding the company back.

Manufacturing challenges put the investment case for Tesla at risk
The case for Tesla as an investment doesn’t rest on the Model X. More than anything else, it rests on the model that will follow: the long-awaited Model 3.

Tesla hopes that the Model 3 will compete head to head with mass-market gasoline cars, at a price around $35,000 — and that it will boost Tesla’s total sales to around 500,000 cars a year by 2020.

Tesla has access to a whole lot of expertise, and it should be able to ramp up production to around 500,000 cars a year — if not by 2020, then by soon after. But the big incumbents will have caught up with Tesla’s battery-electric technology by then. Can Tesla catch up with their huge advantage in manufacturing efficiency?

Or put another way, will Tesla be able to compete on price with the big guys and still make money? For Tesla investors, that’s the question. One way or another, the answer will be found on Tesla’s factory floor.

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TIME Autos

This Is the Whopping Amount Tesla Loses on Every Model S

Tesla Model S
Boston Globe—Boston Globe via Getty Images The Tesla Model S in the Globe parking lot.

It's still a small automaker

Tesla’s Model S electric sedan celebrated its third anniversary during the second quarter of 2015. But the automaker is losing more than $4,000 on every Model S it sells.

That figure comes by way of a Reuters analysis, which found that Tesla burned through $359 million in cash last quarter even while when luxury vehicles are hot sellers. Tesla had just $1.15 billion on hand as of June 30, down from $2.67 billion a year earlier.

Meanwhile, bigger and more established auto makers like General Motors and Ford have been busy rebuilding their balance sheets since the recession badly bruised the auto industry, sending both GM and Chrysler into bankruptcy. GM and Ford have benefited from selling more larger trucks and SUVs, which command higher prices and are more profitable than smaller cars. Tesla is also working on an electric SUV, named the Model X and set for release this fall.

Though Tesla’s shares have been skyrocketing since 2013, it still remains a tiny player in the global auto industry. The company produced just 12,807 vehicles last quarter. It is only expecting to deliver between 50,000 to 55,000 Model S and Model X cars this year. By way of comparison, General Motors sells more than 9 million vehicles a year.

TIME CEOs

Check Out This Insane Stunt Elon Musk Just Pulled Off

It will throw you for a hyperloop

It’s probably safe to say Elon Musk isn’t afraid of heights, given that he runs a space exploration startup. But now we have definitive proof. The Tesla and SpaceX CEO posted a picture of himself on Instagram standing atop an airplane as it flies through the sky. The daredevil stunt is known as wingwalking. “What could go wrong?” Musk asked in the photo caption.

Went for a nice wing walk. What could possibly go wrong? Photo by my lovely wife @talulahrm

A photo posted by Elon Musk (@elonmusk) on

Musk’s wife, Talulah Riley, also got in on the fun and posted a video of herself wingwalking. The couple was flying with the Breitling wingwalking team in Hampshire, England, according to a comment by Riley on Instagram.

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