DailyTech - Tesla Motors Posts First Profit

Submit News

Auto Tesla Motors Posts First Profit
Jason Mick (Blog) - August 10, 2009 10:24 AM

70 comment(s) - last by .. on Aug 30 at 8:51 AM

A now profitable Tesla motors hopes that a $49,900 Model S sedan will send its profit soaring to even greater heights.

The company is also launching the Roadster Sport model in 2011. (Source: Tesla Motors)

After years of losses, the company's persistence is finally paying off

Luxury electric car maker Tesla Motors appears to be firing on all cylinders. Despite a painful couple of years that saw the company cutting back to survive the recession, the company emerged stronger than ever. Thanks to a new partnership with Daimler, additional engineering, distribution, and marketing resources were gained. And most importantly, Tesla finally began to deliver vehicles.

Now the company can celebrate an important milestone -- its first profit. After many months in the red, July saw the company in the black, making $1M USD in profit on $20M USD in revenue. The profits came thanks to a record 109 cars shipped in the month. Manufacturing cost cuts also helped to enable the profit.

Tesla Chief Executive Elon Musk comments, "There is strong demand for a car that is unique in offering high performance with a clean conscience. Customers know that in buying the Roadster they are helping fund development of our mass market electric cars."

Tesla, like many R&D driven greentech firms, offered a target date for profitability. However, it appears that Tesla is one of the few to actually deliver on such a date -- having projected a profit in "mid-2009".

The Tesla Roadster undeniably features the most attractive production electric vehicle body design to date. They also offer fittingly sporty performance and a utilitarian 244-mile range. In other words, while expensive, the Roadsters do deliver a strong experience. Currently, the Roadsters retail for a base price of $109,000.

Tesla has borrowed $465M USD from the U.S. Department of Energy, to produce a luxury sedan reachable by more customers at a price point of $49,900. This new model will be called the Model S.

The company is also working with Daimler to create electric versions of the popular Smart car. Late this year, the company will deploy a fleet of the 1,000 of the electrified ultra-compact vehicles. Tesla is also set to deploy a higher-performance version of the Roadster -- the Roadster Sport -- in 2011.

Comments

Threshold

Username
Password
remember me

This article is over a month old, voting and posting comments is disabled

RE: You're Welcome Tesla

By BansheeX on 8/10/2009 12:08:19 PM , Rating: 1

quote:
Also, you don't seem to understand how investment works.

And you don't seem to understand what investment is. In real capitalism, a company has to convince private earners to forsake immediate consumption and voluntarily loan them, and not others, their savings(production) at interest in hopes of far greater deferred consumption. Key things to note in that description: voluntary loans and competing with other businesses for those loans. Your idea of "investment" doesn't have those qualities. If politicians truly believed in the profit potential of a company, they would invest their OWN earnings into it like everyone else. Instead, they dole out someone's else's for in exchange for campaign contributions. Why? Because they can't directly keep taxes, but they can trade it for a favor that accomplishes that. How can you say that model will result in more good investments than bad?

And, as always on DailyTech, most of the users seem to understand this, but praise the choices they like as if they somehow make up for the thousands of bad ones. It's idiotic, when you see a critic of programs like this, they're not critiquing the choice relative to others, they're critiquing the the whole bloody model and believe, correctly, that far better investment choices would be made on the whole if that tax money had stayed in the hands of the people who earned it.

Parent

RE: You're Welcome Tesla

By TomZ on 8/10/09, Rating: 0

RE: You're Welcome Tesla

By zsdersw on 8/10/2009 4:18:52 PM , Rating: 3

The problem with being pro-capitalist and electing those who advocate it in the US these days is that you get a lot of unwanted extras; social conservatism, religious evangelism, and an altogether idiotic notion that while government should stay out of our finances it should meddle more and more with the social aspects of our lives.

I, for one, will never vote for such idiots.

Parent

RE: You're Welcome Tesla

By TomZ on 8/10/2009 4:34:40 PM , Rating: 2

I agree, but the reality of certain "bad" politicians shouldn't dissuade you from still striving for the correct principles.

And quite honestly, the harm done during the Bush administration by his religious views will probably be dwarfed by the spending and bailing out being carried out by the current administration. That debt ain't going to pay itself back.

Parent

RE: You're Welcome Tesla

By zsdersw on 8/10/2009 6:40:59 PM , Rating: 2

quote:
but the reality of certain "bad" politicians shouldn't dissuade you from still striving for the correct principles.

Who said it was?

Parent

RE: You're Welcome Tesla

By Keeir on 8/10/2009 3:33:30 PM , Rating: 2

I have no idea why you were rated down. I would rate up, but I can't so hopefully this pull attention.

However, I would add to your description that some model for funding projects that remove externalities should be in existence.

Purely capitalism based loaning will simply reward companies who can foster costs on general society in an indirect method. IE, Air pollution shortens people lives and this cost savings would never be part of Tesla's bottom line.

Parent

RE: You're Welcome Tesla

By 3minence on 8/10/2009 3:47:50 PM , Rating: 2

And you don't seem to understand what government investment is. One of the roles of government is to do what private industry can't. NASA is one of those things. So was the transcontinental railroad. The US government had to give land to the railroads which they then sold to pay for building the railroads. Railroads which were critical for this country to become what we know it as today. Public Education is another function. Public education pays no direct returns what-so-ever but yet it is critical to a modern democracy.

The government is investing in Tesla in order to encourage a new, currently unprofitable technology, in the hopes that eventually the technology will become cheaper, more widespread, and profitable. It may or may not work, but history shows the practice can be very useful.

Parent

RE: You're Welcome Tesla

By TomZ on 8/10/2009 4:40:11 PM , Rating: 2

The problem is that the potential public benefit of the goverment sponsoring Tesla is not clear. I don't see how a small niche manufacturer of expensive cars is going to begin to solve any kind of energy problems we face in this country.

You can't really compare Tesla to the public benefit of the transcontinental railroad, the US highway system, or similar other investments. That's absurd.

What I do see is the potential for some of the ultra-rich to get even more rich due to government handouts at the expense of the public debt. We are all suckers who allow that to happen.

Parent

RE: You're Welcome Tesla

By Murst on 8/10/2009 6:21:54 PM , Rating: 2

When the government was investing in the railroads, it was also unclear as to whether that was a good investment or not. Instead of making this a huge history lesson, I encourage you to look into what happened in the US with canal building, and then the railroad industry.

Is Tesla really a bad investment? That will not be determined for a long while, most likely. But who knows... maybe Tesla will contract out their battery making to a manufacturer ( using the provided gov't money ), and the battery manufacturer will discover a new way to make batteries thus eliminating our dependence on fossil fuels.

Point is... no one, including Warren Buffet ( who is probably the most successful investor ) really knows whether something is a good investment or not. Some people are better than others, but no one is 100% correct.

quote:
What I do see is the potential for some of the ultra-rich to get even more rich due to government handouts at the expense of the public debt.

What I see is that the ultra-rich are afraid that their massive wealth growth over the last 9 years is about to slow down, and the benefits will now target the middle and lower classes... but that's another discussion. ;)

Parent

RE: You're Welcome Tesla

By 3minence on 8/10/2009 9:52:12 PM , Rating: 2

You are failing to see the forest through the trees. Are you really trying to be dense or does it come naturally? I used the transcontinental to demonstrate the purpose and benefits of government investments. Their is obviously a huge difference in scale and impact between Tesla and the railroads.

The investment in Tesla is one of many in the energy and transportation field. The government is investing money in numerous energy producing schemes, be it wind, solar, or whatever. Much less known are investments in infrastructure (power grid). As much as I hated Bush, he was correct about our power grid. It needs to be upgraded. With Tesla the government is encouraging improvements in non-gas powered vehicles. I also seem to remember money going to hydrogen car research. Obviously the government is investing in multiple technologies in the hope that one or more bears fruit.

Will some people get rich off this? Yes. Welcome to reality. Unfortunately life is not fair and that's just how it works. And to go back to the railroad example, along with being very beneficial to the country it too made some people extremely rich.

Parent