New York. French automaker Renault and its Japanese partner Nissan Motor continue to increase savings through synergies and can meet longer-term goals without expanding its current alliances, chief executive Carlos Ghosn told Reuters on Wednesday.

The two saved “much more” than 3 billion euros ($3.31 billion) in 2014 from sharing costs for new vehicles and technology development, compared with 2.8 billion euros in the previous year, he said. The companies are scheduled to release final figures for the synergies, or cost savings, from their joint programs in July.

Nissan and Renault can continue to cut the costs of developing new cars and trucks, including electric vehicles, and be competitive without taking on another partner, he said. The alliance’s goal is to save 4.3 billion euros by 2016.

The Renault-Nissan alliance discloses its tally of cost savings as an indicator of the advantages the two automakers gain from collaborating on the development of new vehicles and technologies such as autonomous driving systems.

The alliance, formed in 1999 when Renault rescued Nissan from collapse, resulted in a cross shareholding arrangement in which Renault owns 43.4 percent of Nissan, while the Japanese company has a 15 percent stake in the French automaker. Ghosn, 61, is chief executive of both.

Nissan is now bigger than Renault, and sells about two-thirds of the 8 million vehicles sold annually by the two.

The alliance has since grown to include German luxury car maker Daimler and Japan’s Mitsubishi Motors. Daimler and Renault-Nissan now have 13 joint projects under way, Ghosn said.

Sergio Marchionne, head of Fiat Chrysler Automobiles, stirred up the auto industry recently by campaigning for more consolidation to help sustain the heavy investments needed to meet demands for cleaner, safer vehicles.

Ghosn said Renault and Nissan don’t need to find new partners.

“I don’t have to go beyond the boundary of what I’m doing to be competitive,” Ghosn said. “I can understand other people would have to.”

Ghosn pointed to the Renault Kwid, launched in India last month at a starting price of about 4,000 euros. The low-cost underpinnings of the small, utility vehicle were designed in India and will be the basis of a new model for Nissan’s Datsun brand that will launch next year, Ghosn said.

Depending on how well the vehicles do in India, Ghosn said the Kwid’s architecture, called the “A platform,” will be used in other markets around the world. “It’s a global platform.”

Future vehicles from the A platform will be built locally in new markets such as Africa or South America, Ghosn said, not exported from India.

Reuters

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Tesla Motors reported a wider first-quarter net loss on Wednesday, but outperformed expectations and stuck to key milestones for the year ahead, despite pressure on margins.

Chief executive officer Elon Musk said during a conference call that demand for the company’s new line of stationary energy storage systems, unveiled last week, is “off the hook.”

Over time, it was possible stationary storage could be a bigger business for Tesla than selling cars, he added.

Tesla said in a letter to shareholders on Wednesday that “total addressable market size for Tesla Energy products is enormous and much easier to scale globally than vehicle sales.”

Musk said last week that the stationary battery storage systems could be “materially profitable” sometime next year.

The shares of the Silicon Valley electric car maker rose about 2 percent after hours from their close of $230.43.

The challenges confronting Tesla’s auto business were illustrated by the company’s continued cash burn and signs of pressure on profit margins.

Tesla’s cash reserves fell to $1.5 billion as of March 31 from $1.9 billion at the end of 2014. The company said it plans a total of $1.5 billion in capital spending this year, much of it to buy production tools for the Model X, complete its large battery “gigafactory” in Nevada, and for other facilities.

Musk said Tesla’s cash flow should turn positive later in the year.

“It’s extremely likely cash flow is really good” by the end of the fourth quarter, he said.

Chief financial officer Deepak Ahuja said Tesla is looking at establishing asset backed lines of credit to “assure we have a strong balance sheet.”

Tesla reported an adjusted net loss of 36 cents a share in the latest quarter, excluding certain expenses, compared with a profit of 14 cents a share on the same basis a year ago. Analysts had expected a loss of 50 cents a share on that adjusted basis.

Tesla had a net loss in the first quarter of $154.2 million, or $1.22 a share, on revenues of $939.9 million. A year ago, Tesla reported a net loss of $49.8 million, on revenues of $620.5 million.

However, the automaker warned that a “less rich product mix” could push down average selling prices for the Model S sedan, which now starts at $76,200.

Tesla delivered 10,045 Model S sedans in the first quarter, a 55 percent increase from the year before. The company forecast deliveries of 10,000 to 11,000 vehicles in the second quarter.

Tesla could face more competition in the future as established automakers field new electric vehicles with longer driving ranges. There is also the potential other well capitalized Silicon Valley companies such as Apple Inc or Google Inc will move into the market.

Asked about that, Musk said: “I certainly hope Apple gets into the car business. That would be great.”

Tesla said it will start delivering its Model X sport utility vehicle late in the third quarter, still within the window the company promised earlier this year. The Model X is critical to Tesla’s goal of delivering 55,000 vehicles this year.

Reuters

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