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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.

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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.

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.

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.

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. ;)

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.

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