Slashdot Mirror
Tesla Motors Turns a Profit For the First Time
d0rp writes with news that Tesla Motors has reported earning a profit for the first time in its six-year history. Sales of the $109,000 Roadster earned the company $20 million in revenue, which settled out to $1 million in profits. "Most of that money rolled in after Tesla delivered cars customers had already placed deposits on. Although the company has, according to spokeswoman Rachel Konrad, seen a 'surge' in orders for the Roadster and the higher-performance Roadster Sport (price: $127,500), it isn't likely to keep rolling cars out so quickly. Konrad says Tesla is 'definitely on pace' to meet its goal of 1,000 to 1,200 cars a year but didn't say when that might happen. Tesla has so far delivered about 609 Roadsters since production started in March, 2008." The company is working on a new 'Model S' sedan, with the help of $465 million in government loans, and has also entered into a partnership with Daimler to help the German auto company produce electric Smart cars.
This should be taken with a bit of skepticism. There's a difference between positive cash flow (more cash coming in than going out), positive net income (what most people think of as 'profit') and positive EBITDA (earnings before interest, taxes, depreciation, and amortization, or profit from operations). TFA doesn't mention which Tesla is reporting.
I have been following Tesla for a long time, and certainly have been cheering them on. Mostly because THEY are SINGLY HANDED Responsible for forcing ALL OF THE MAJOR car makers to go to electric. Not a one wanted to go down this path. BUT, tesla has forced it. OTH, they like to claim that they are an American Car builder. Nothing could be further from the truth. Where do the current motors and electronics come from? Taiwan. Where does the processed lithium come from? China. The body and frame CURRENTLY comes from Lotus, but that will be coming shortly from America. If Elon was smart, he would push for motors from America (which DOES have a number of companies that produce these). Likewise, he would consider pushing for Lithium from other sources, rather than solely China. China (and somewhat Taiwan) have a LONG history of out and out stealing IP. It is only a matter of time before any quiet IP will show up in competitors. But if America is loaning him the money for this, I would like to see more of his source come from America. At least from those countries that will honor IP and have their money freely floating against ours and not have trade barriers.
I at least feel better about money going towards developing a product that may help out ongoing energy problems
Just because its all electric doesn't mean it will solve our energy problems. It just offloads the burden to another infrastructure. Currently our use of fossil fuels is generating most of our electricity, dump a few million electric cars on the grid and sure you save some gas and emissions (and coal plants have much better filtration and carbon capture than combustion engines) but at the cost of stressing our electric grid. The efficiency of converting gas into kinetic energy is relatively high, as far as energy conversions go. Converting fuels into electricity is far less efficient, not to mention losses from battery storage.
don't get me wrong, i'd love for everyone to drive an electric car instead of a combustion engine, but our grid isn't capable of supporting that dream yet. The change will come, but it will be slow, and driven by economics.
They aren't getting the loan for making more Tesla Roadsters... but for their new Tesla Model S sedan. Which is a lot more affordable (and useful) than the Roadster. Still more pricey than a normal car, but it's definitely going in the right direction.
It could even be a hit here in Norway, as it will be exempt from all normal car taxes (which easily make most cars 2 times or more expensive than in the US) - it will even be exempt from the VAT (25%). Exporting US cars again would be nice, wouldn't it?
Tesla also has a revered brand for which people are willing to pay.
On the manufacturing side they are some advantages as well. They have very few long term commitment contracts with suppliers who make parts that are irrelevant to electric cars. They are very few if any long term commitment contracts to labor organizations to keep organizational charts wide and heavy. They have few if any long term contracts with city, county or state governments regarding factory locations or employment levels. They have few if any long term leases on land and facilities that must be used or create a financial drag on the organization. They have few if any dealership agreements with odd inventory management clauses that cause inconsistent and inefficient bullwhip effects through the entire supply chain. They have few if any contracts with top executives who demand lavish lifestyles or are ineffectual without hundreds of subordinates that somehow make things happen in spite of their ignorance and egos.
On the down side, they do not have a manufacturing plan or a well built organization to support such a plant. With the big automakers suffering Tesla will likely get to pick the cream of the crop of executives and management to create this without falling into many of the pitfall often plagued by young organizations.
-rd
The infrastructure is already in place in some cities. In Los Angeles, where I expect to see more than a couple of Teslas on the road, there have been signs for electric vehicle charging stations all over the place for years.
http://twitter.com/OLDTELEGRAM
No need to fight wars for a nuclear, or solar or wind energie or geo-energie.
That is the beauty of the electric grid. it don't give a damn what you hook up to it.
Petrol cars run on petrol.
Electric cars run on anything that pump out juice.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
They've spent far less money than GM spent on the EV-1, and have almost as many cars on the road. About 1100 EV1 cars were produced.
The current version of the Tesla roadster is a reasonably good sports car. Speed is good, acceleration is very good, the range is 200 miles, and it looks good as it whooshes by. It's overpriced, but there's hope of getting that down as volume goes up.
They had some initial problems stemming from trying to make it go fast. First they had motor overheating problems at high revs, so they put in a two-speed transmission. That was a disaster; shifting under load ate up the transmission because the two speeds were too far apart. Then they went back to a simple single speed transmission, but water-cooled the motor, which simplified the mechanics and got them the desired top speed. The current drive train seems to be holding up well. Top speed is only 125MPH, which is low for $100K+ sports cars, but few customers really take their Ferraris to a track anyway.
I see Teslas on the road almost daily. I live near the Silicon Valley dealership and on a road the sales reps use for demos. They change lanes very smoothly, with all that battery mass holding the center of gravity down.
Why should I pay taxes to give $465 million dollars to a company that GROSSES $20 million a year?!
Ideally, the company will make enough of a profit in the future (I'm using the old-fashioned definition of "future" of a few to maybe even 20 years, not the new corporate definition of "this quarter") that they can pay back that loan. Not quite as ideal, but still not bad, is that even if they don't end up paying back the entire loan, the technology that comes out of it will save more than $465 million in fuel use and environmental cleanup. Whether or not either of these outcomes actually happens, of course, remains to be seen.
That 465 million dollar loan can lead to billions in business for 50+ years. Would you think that's worse than giving a dying company billions?