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Tesla CEO Elon Musk says his company isn't worried about quarterly profitability. The Starkish playboy, who also founded SpaceX, recently rode away with millions in cash after selling part of his stock in Tesla's IPO.   (Source: Michael Graham Richard)

Tesla hopes to return to profitability in 2012 when it rolls out its new Model S EV.  (Source: Autoblog)
Company says it doesn't care about quarterly profitability

Tesla is sort of like hip-hop superstar of the auto world -- it's blowing through money like it could be dead tomorrow.  

The company had plenty of promising news so far this year.  In May it announced that Toyota invested in it and contracting it to help produce Toyota's upcoming electric RAV4 crossover SUV.  The company also secured $226M USD in cash from a initial public offering of stock.

However, according to its latest earnings report it bled out $103M USD in only its first 3 quarters to date.  Its latest loss -- for Q3 2010 -- was at $34.9M USD.  That's disappointing considering that in Q3 2009 the company only lost only $4.6M USD, and was profitable for the first two quarters of 2009.

Company founder and chief executive Elon Musk received the news of the big loss casually, commenting to the 
San Jose Mercury News, "Attaining quarterly profitability isn’t a goal… We’re very focused on long-term profitability."

Mr. Musk who pocketed a tidy sum of cash during the stock offering, says that with Toyota's support, too, the losses are less of a concern, writing in the earnings report:

We are very pleased to report steady top-line growth and significant growth in gross margin, driven by the continued improvement in Roadster orders and our growing powertrain business. Roadster orders in this quarter hit a new high since the third quarter of 2008, having increased over 15% from last quarter. While some of this is due to seasonal effects associated with selling a convertible during the summer months, we are pleased with the global expansion of the Roadster business and the continued validation of Tesla’s technology leadership position evidenced by our new and expanding strategic relationships.

So if Roadster orders are increasing, why is Tesla losing so much money?  The answer lies in its entry-level luxury electric vehicle, the Model S, which it wants to roll out.  Tesla hopes to sell the car for around $40K USD, after tax credit.  However, cutting its production costs in half is no easy chore -- particularly when Tesla hopes to complete the vehicle in just over one more year, beginning assembly in early 2012.

Tesla also has the advantage of strong support from the Obama administration and the U.S. government.  President Obama recently urged Republicans in Congress to back EV funding.

Those factors have led investors to be generally optimistic, and share prices currently are at above $24/share, over a 40 percent gain over the IPO price of $17/share.

The critical test for Tesla, though, will come in 2012 -- the same year that the Roadster will cease production.  If it can't deliver sufficient quantities of the 2013 Tesla Model S, or if it faces delays that could spell disaster for the newly public automaker.  And even if it can 
produce the vehicle, it faces the further test of whether the relative "masses" of entry luxury buyers really desire an electric vehicle from a relatively green automaker.  Tesla and Mr. Musk believe (or at least say they believe) that the Model S will sell very well -- and they better hope so, as the company's success depends on it.



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My Tesla Roadster experience was a BLAST!
By Iaiken on 11/10/2010 2:11:36 PM , Rating: 2
While I didn't get to live with the car, I got to take a 2.0 version in jet black out on Leguna Seca back in April and it was a totally different kind of automotive experience than anything I have had before.

It was like driving a sexier, more refined version of the future. The car was nimble, powerful, quick, responsive and forgiving. With the top on and the windows up, the silence made me feel like I was driving a high-speed ninja.

While the car is far from perfect, my only criticisms would have to be the disconnect I experienced in the silence (once the novelty had worn off) and the low top speed.

It just feels unnatural to be doing 100mph and climbing to the accompaniment of nothing more than the sound of the tires on the road and the air rushing by.

The low top speed is weird because you get up to the 120mph mark so quickly (~9 sec) and then suddenly the fun is pretty much over and you have 1/2 a straightaway to go. My '06 JCW can put the needle off the end of the speedo(which stops at 150mph) on the back straight of Mosport.

I guess what I am saying is that it's kind of a mixed bag. The car is great for public roads and the twisties, but leaves a lot to be desired when it has room to run flat out.




RE: My Tesla Roadster experience was a BLAST!
By Reclaimer77 on 11/10/2010 2:37:37 PM , Rating: 2
Really? That's not the experience most people paid to wring cars out seem to share. The Tesla is disjointed, disassociated, and all together disinterested. The batteries alone weight half a ton, and all that localized dead weight makes the Tesla transition like a car 3 times it's size. Couple that with tires made for reduced rolling resistance and not lateral grip, and this thing slides all over the place.


RE: My Tesla Roadster experience was a BLAST!
By Pirks on 11/10/10, Rating: -1
RE: My Tesla Roadster experience was a BLAST!
By Reclaimer77 on 11/10/10, Rating: 0
RE: My Tesla Roadster experience was a BLAST!
By Iaiken on 11/10/2010 4:07:14 PM , Rating: 2
quote:
Couple that with tires made for reduced rolling resistance and not lateral grip, and this thing slides all over the place.


I was on racing compounds.

quote:
That's not the experience most people paid to wring cars out seem to share.


Well Reclaimer, I guess that depends on if you are a purist/aficionado, or just a guy who likes cars. I've driven my CTO's Ferrari 360 Modena and some friends and I rented a trio of supercars (Gallardo, GT3 and a Viper) from GTA exotics for a friends bachelor/going-away party back in 2008. Don't let me be mistaken, it has very little in common with any of those cars.

The car is certainly in control of what you are doing, inputs are all essentially taken care of by the car and applied to the drive. Try to hoon it and the computer steps in, start loosing traction in an turn and the computer steps in. I can understand how this could drive a purist crazy, but I'm a huge nerd and flying through the corkscrew in a lotus-bodied electric car made my day.

Other peoples experiences may be very different from mine, but for me, it was a fun day in the sun and I liked it.

ps: Nothing makes you behave yourself in a Lambo quite like a $7000 deposit.


By Spuke on 11/10/2010 6:21:58 PM , Rating: 3
quote:
Other peoples experiences may be very different from mine, but for me, it was a fun day in the sun and I liked it.
A day at the track is always a good time! Glad you enjoyed yourself.


RE: My Tesla Roadster experience was a BLAST!
By Reclaimer77 on 11/10/2010 6:51:40 PM , Rating: 2
quote:
I was on racing compounds.


Well no wonder, that's cheating! lol.

quote:
Don't let me be mistaken, it has very little in common with any of those cars.


Ok that's cool, for a minute there I was getting worried.

So Top Gear only got like 40 miles out of the Tesla in hard track use before the batteries died. So they got in another different Roadster and THAT one's electric motor quickly overheated and died after only a few laps. How did you guys fare?


By Iaiken on 11/10/2010 7:12:27 PM , Rating: 2
quote:
Well no wonder, that's cheating! lol.


It's not whether you win or lose, cheat to win.


RE: My Tesla Roadster experience was a BLAST!
By yomamafor1 on 11/11/2010 10:24:58 AM , Rating: 2
Yes, because technology improves through constant bashing of new technology. That is similar to bashing the original ICE vehicles for being slower than the horses they were poised to replace.

Commercial electric car technology is still in its infancy. It wasn't until recently Lithion Ion battery became much cheaper and lighter for consumer use. Give it a few years, then it will outperform the ICE it is poised to replace.


By Reclaimer77 on 11/11/2010 6:48:45 PM , Rating: 2
Again, there is no "new technology" in the Tesla. They took the electric car, which already existed, crammed 2,000 laptop batteries and wrapped it in a roaster body. Hell the body isn't even unique, it's from a Lotus.

And let me be perfectly clear about this, and I know a lot of people don't want to hear this. But electric cars will never, EVER, be on par with ICE vehicles. A "few years"? Define few please. When there is an electric car that can go 300 miles on a charge, and charge in minutes not hours, call me up. Oh nevermind, because I'll be dead before that happens. THAT'S how far behind ICE we're talking here, and it will NEVER catch up.

We see how electric cars plan to "compete". Get increasingly large government handouts, while at the same time ICE manufacturers are slammed with increasing regulation, absurd economy standards, and other such Government interference. That's NOT competing, my friend, that's called cheating.


RE: My Tesla Roadster experience was a BLAST!
By ChuckDriver on 11/10/2010 3:02:16 PM , Rating: 2
quote:
My '06 JCW can put the needle off the end of the speedo(which stops at 150mph) on the back straight of Mosport.


Can you describe the feeling of doing 150 MPH in a Mini Cooper? I'm more curious about that than the Tesla.


By Iaiken on 11/10/2010 3:42:53 PM , Rating: 2
I've only done it over at Mosport because Watkins Glen uses a pace car (last time it was a truck) to limit everyone to 120mph.

The car is well-built, firm suspension with a low ride, the aero kit and spoiler actually start to work and you feel firmly planted on the road and in control.

It's strangely more comfortable than one might think, though once you get over 140 even the five car widths of the Mario Andretti straightaway starts to feel awfully narrow. There are some minor annoyances, cabin trim starts to rattle and the wind noise is obnoxiously loud (it's not exactly a slippy shaped car).

I'm pretty sure that for how long I had the needle off the speedo and that the revs were still climbing to red-line, I must have been in the neighborhood of 160mph. Then before I knew it, you're bringing it down to 60 for the exit turn and you're glad those massive 12.4" 4-piston Brembo's are there to stop you.

ps: If you own an '07-'9 Cooper S or JCW and you plan to lap it, get your software updated because there is a bug in the older ECU where it stops calculating fuel consumption over 200kph. One of my friends found out the hard way when he ran out of gas on Watkins and the indicator read that he was still 1/4 full.


By theapparition on 11/10/2010 3:27:58 PM , Rating: 1
Top speed is definately an issue, as well as driving more than a few laps, as the car quickly runs out of juice at that speed.


RE: My Tesla Roadster experience was a BLAST!
By Runiteshark on 11/11/2010 2:53:52 AM , Rating: 2
Here's a question, have you driven the Exige s240 at all?

I drove the Tesla 2.0 as well and well.. Honestly laughed. It's great and all in straight line acceleration just as you claim but I felt like the cornering was absolutely terrible in comparison to its original Lotus sister. You can defiantly feel the extra weight of the batteries in the tight corners the most, where I felt like it rolled far too much.

If they come with a way to shrink batteries by 80% I think that the tesla would be a real hit, but as I'm sure we'd both agree, that's not going to happen any time soon. For the time being I'll stick to ICE's for now.


By Iaiken on 11/11/2010 9:44:39 AM , Rating: 2
quote:
Here's a question, have you driven the Exige s240 at all?


Never had that pleasure, no.


By FITCamaro on 11/11/2010 9:27:33 AM , Rating: 2
So what'd it last? 2 laps? 3?


By Ammohunt on 11/11/2010 4:58:51 PM , Rating: 2
I have driven an Audi A4 1.9 TDI Station wagon at 149MPH on the autobahn in southern Germany loaded with 4 people + luggage at less than 5k on the tach. I wouldn't trade a tesla for a car like that. Diesel is the future.


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