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.

Comments

First...

[Anonymous Coward]

...year of profits!

'profit' can mean different things

[lapsed]

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.

Re:'profit' can mean different things

[seanadams.com]

There are lies, damned lies, and accounting.

earnings before interest, taxes, depreciation, and amortization

The latter two of which are absolutely huge for a brand new manufacturing operation that is not running at capacity. EBITDA always makes me chuckle a little. See it started as EBIT, then became EBITDA because the PHBs said no, really we need to look profitable so we can get this loan or whatever. Pretty soon it'll be EBITDAP (payroll) and then EBITDAPHAB (hookers and blow) etc.

Kind of like how the mortgage brokers in their heyday were allowed to use a modified credit rating, essentially calculated as "here's what your credit rating WOULD be if we overlooked all the negative stuff". I wish I was kidding.

Re:'profit' can mean different things

[Anonymous Coward]

If by panned HARD you mean Top Gear faked it running out of charge and that Jeremy Clarkson's predetermined opinions warrant being classed as an unbiased review then sure.

They do some funny stuff on Top Gear but the know stuff all about cars and their 'testing' is a joke. Seriously. You are going to end up disappointed if you buy a car based on one of the reviews. That is if you actually happen to see one of the rare episodes they lower themselves to road test a car that costs less than £50,000. Anyone with even a little bit of motor vehicle knowledge will see through the sensationalist rubbish that they call road tests. If you want a Top Gear recommendation make out it is an Italian sports car and they will fall over themselves to stick their cocks up its the exhaust. No how matter how shit and unreliable Alfa Romeo makes their cars Clarkson and Co will insist they will buy one anyway. And they would sell their Granny to say wonderful things about a 1970s Ford Cortina if you tapped a Ferrari badge to the bonnet.

Re:'profit' can mean different things

[Random Destruction]

Indeed. the beeb admitted that the cars never ran out of juice. That scene was faked to "show what would happen if the battery had actually been depleted."

Re:Private property. Keep out

[Deadstick]

the insinuance that somehow because someone owns something that was granted to them by the government that somehow they have a monopoly over it

That would seem to be a fairly accurate definition of "patent"...

rj

Re:Private property. Keep out

[BadAnalogyGuy]

No. It's pure naivete to think that Tesla will somehow continue in this business as a car manufacturer. They don't even manufacture the body of the car they sell. They are an IP company through and through. Their only hope is to have a good patent chest and find licensees.

Daimler seems to be interested, and I'm sure they aren't the only ones who want to build an electric vehicle.

Anyone who thinks Tesla will be around as a car manufacturer 3 years from now ought to buy stock in Moller today.

465 Million $ loan??

[smallshot]

How does a company that makes $1,000,000 in profit over 1 full year, get 465 Million dollars in loans from our government?? How will they pay that back in a reasonable time?

Re:465 Million $ loan??

[shway]

The government loan was not for their Roadster business (of which they just posted a profit) it was to create the upcoming Model S sedan. They will pay back the loan by selling the Model S, which they plan to start in 2011 after they build use their government loans to build a manufacturing facility.

Re:465 Million $ loan??

[Jeremi]

I would feel better if they were making an AFFORDABLE economical vehicle that would benefit the majority of Americans (and the environment).

Me too, but experience has shown that you can't approach the problem that way. A number of companies have tried make "economical" electric cars, and they end up looking (and driving) like golf carts, while still costing more than, say, a Honda Civic. So when the companies go to sell these cars, the American public just laughs at them, and the companies quickly go out of business. The companies never have a chance to produce a more attractive product, because they never have a chance to establish the manufacturing base necessary to make electric vehicles efficiently, and therefore they can't compete with gas-powered cars.

Tesla is trying to opposite approach: instead of trying to compete with Ford/Honda/Toyota/GM/etc on the low end (an economic suicide mission), they are starting from the high end and working their way down. It turns out that you can make a fairly competitive electric sports-car, because at the high end, pricing is less of an obstacle to consumer acceptance, and therefore you can sell cars even if you have to give them a pretty large markup to offset your startup costs.

Tesla's next step after the Roadster will be to sell the Model S, which will compete with the Mercedes and the BMWs of the world and sell in greater numbers than the niche Roadster product. Assuming the Model S is successful, their next product will be an even more inexpensive model to compete with the Nissans and Hondas of the world. At each step of the way, they leverage the capital and knowledge gained in the previous product to make something that is more mainstream, more cheaply than they previously could have done. In this way, they (hopefully) have a viable path towards making electric cars a popular mass-market product, which is something that you can't say for the electric-car companies that tried things your way and failed.

Who knows whether they will succeed or not, but the plan certainly has its merits.

Making 10,000 unaffordable "green" cars over 10 years has very little environmental impact and not worth my tax dollars in my opinion

That isn't the goal, so your opinion is unfounded.

Re:Where in the hell do people get this money?

[Frosty Piss]

Seriously, I don't know anyone that could just blow $100k on a car. Where are these people getting all this money and why does it seem like there are so many of them?!

Well, look around you next time you're out on the road. See those huge new pick-ups and SUVs? Many are up in the 60k range, and for a sports car, those same type of people are the customers. People who have few obligations such as family and making "good money" plunk down that kind of change for toys all the time.

But the carrot is that the technology in these 100k$ cars will trickle down to cheaper, more consumer targeted vehicles.

Re:it ain't easy being green...

[Anonymous Coward]

I call bs on this statement: "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."

The efficiency of converting gas into kinetic energy is NOT relatively high, Theoretical max of ~30%, in a high efficiency car it will be in the upper 20s.
Converting fuels into electricity is NOT far less efficient, Theoretical max of ~70%, and this is just using a steam turbine generator, ie coal plant.

The truth is that ~70% of the energy stored in gas is heat, ~30% is expansion. The internal combustion engine uses the expansion of gasses, and then uses energy to throw away the heat.

In order for gas to be more efficient you have to have over 50% loss. The loss areas include: electric transmission 92.8% efficient, storage in lithium batteries 90%, and the electric to kinetic( the electric motor) 89%. This is equivalent to over 48% net efficiency. and 48% >> 28%. This is not even taking into account the benefit of regenerative braking.

If you convert the cost per mile (of energy ie electricity) of a tesla to mpg, is will be in the 230 mpg range. Find me a internal combustion engine that can support that.

Re:Customer is a sucker... do the math

[Bobby Mahoney]

Why does it have to be about the environment or saving fuel?

How about having 100% of torque available at all speeds?

Besides, $109k for any car that does 0-60 in less than 4 (and has a chassis designed by lotus) is not a bad a deal - bonus if you never have to fill the thing with some flammable/combustible liquid to get it to work.

Maybe it makes me an asshole, but electric cars and hybrids for the sake of being 'green' are a stupid idea anyways, and I've grown to hate the notion that electric motivation = environmentally minded.

Eliminating the power curve and hundreds of additional moving parts from the gasoline engine formula makes for such huge performance potential for electric motivation.

Finally an electric car that can stand on its own in terms of performance, and is actually usable for every day - an electric car for those who appreciate performance, and decidedly not, kids with beards.