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Once against fast-tracked startup is making a profit

Tesla Motors, Inc. (TSLA) made waves in June 2010 when it went public, taking the brainchild of PayPal co-founder Elon Musk to a new level of exposure.  But in the wake of the IPO, Tesla was in for a bumpy ride as it wound down sales of its pricey Roadster electric sports car, and attempted to transition into the mid-range luxury market with its upcoming Model S design.  Share prices fell and the company went from turning profits to blowing money fast.

But much like Elon Musk's other startup, SpaceX, Tesla in the end delivered, launching the Model S to market around the time frame it had hoped to, despite some minor delays.

Amidst a market where EV makers are typically full of excuses, delays, and cancellations, Tesla -- like its commercial spacecraft counterpart -- is a rarity.  Now CEO and co-founder Elon Musk brings more good news.

On Monday in a message to his 112,000 Twitter followers, the CEO posted, "Am happy to report that Tesla was narrowly cash flow positive last week.  Continued improvement expected through year end."


The Tesla Model S has returned the EV automaker to positive cashflow.

Currently, Tesla is racing to fulfill demand for the Model S, whose price will be bumped $2,500 to $59,900 USD on Jan. 1.  The vehicles, however, are eligible for a $7,500 USD tax rebate offered by the U.S. government that knocks a bit off the price.

Tesla, which produces vehicles at the old Toyota Motor Comp. (TYO:7203NUMMI factory in Fremont, Calif., plans to sell 20,000 Model S sedans in 2013.  The Model S gets 160 to 300 miles on a charge, depending on which size battery pack is purchased (the base price is for the 160 mile range variant).

It will then follow up in 2014 with the first production run of the Model X, a luxury electric sports vehicle.


Tesla Model X [Source: Automobile Magazine]
 
It's clear that Tesla attacked the part of the market where electric vehicles were most likely to succeed -- the luxury segment, an area where the cost of the battery pack can be defrayed by cutting into the typical markup luxury brands garner.  However, while Tesla makes it look easy, designing and selling luxury EVs is no easy task.

While Tesla's Model S earned the distinction of being Motor Trend's and Automobile magazine's 2013 "Car of the Year", rival Fisker saw its much delayed "Karma" plug-in hybrid electric sports car get widely panned.  Tesla shares have surged 21 percent in 2012, on account of its unlikely success. 

Source: Twitter



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RE: Cue the whiners in 3, 2, 1...
By Chernobyl68 on 12/6/2012 12:18:16 PM , Rating: 2
wait, what? You're ok with a state gov't doing what's best for the state, but not the federal gov't doing what's best for the nation?


RE: Cue the whiners in 3, 2, 1...
By FITCamaro on 12/6/2012 2:03:29 PM , Rating: 2
States have the authority to do whatever their state constitutions allow them to do. The federal government only has the power to spend money on the things it is expressly given the power to spend it on. No where will you find the authority to spend money to promote certain products over others.

It isn't the federal government's job to decide winners and losers in industry. It's job is to provide safety and security for the nation while its citizens go about their lives and succeed or fail based on the decisions they make.


RE: Cue the whiners in 3, 2, 1...
By Paj on 12/7/2012 8:46:57 AM , Rating: 2
That doesn't make a great deal of sense.

Doesn't the US giving a tax break to the domestic energy industry, or subsidies for farming, "decide winners and losers in industry"?

Both are essentially forms of protectionism after all, without which the competitiveness of each respective industry would likely fall in relation to other local or international industries.


"Nowadays, security guys break the Mac every single day. Every single day, they come out with a total exploit, your machine can be taken over totally. I dare anybody to do that once a month on the Windows machine." -- Bill Gates














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