Tesla achieves profitability in July, but for how long?

[wtmusic]

"Seven years into its existence Tesla Motors has achieved a milestone few Silicon Valley startups ever manage: the company was profitable in July 2009. According to a press release from the company today, its July revenues, approximately $20 million, exceeded its expenses by about $1 million. Since Tesla is still a privately held company, it has no obligation to disclose its finances nor to give details on its sales. Thus, Tesla has been very selective about what information it publishes. With that in mind let's take a little look beyond the surface.

In July, the company had its best month yet for Roadster deliveries with 109 cars being placed in customer hands. That in itself is a major achievement for a start-up automaker and is deserving of praise. If we assume an average transaction price of $130,000 with options that comes to $14.2 million in revenue. I'm not a financial expert, but I'm told that the deposits for Model S can't be booked as revenue. That leaves about $6 million in revenue which likely came almost entirely from Daimler for battery packs and charging systems for the Smart ED. That won't be ongoing revenue and in all likelihood is at least break even if not profitable."

http://www.autobloggreen.com/2009/08/07/tesla-achieves-profitability-in-july-but-for-how-long/

[provis99]

1. beautiful car

How come a tiny group of people in Silicon Valley can come up with a great electric sports car that goes 250 miles between charges, while GM, Ford, and Chrysler can't come up with one piddly electric car worth its cost (the GM Volt sucks and is overpriced)

[tomreedtoon]

2. First, sports car owners are certifiably insane.

There is no rational reason to buy a car that runs at maximum speeds that are illegal on the highway. The only reason guys (and yes, very few women) buy sportscars is to establish bragging rights. When you pay $120K or more for those bragging rights, or whatever the hell this toy costs, that's insane.

Second, the emphasis on this car was making it work. Not making it work for a price, or for practicality, but to make it work, period. NASA got a space shuttle to work because they had unlimited funds and the dedication of thousands of geeks.

Third, comparing such an organization to a megacorporation like GM (used to be) is unfair. GM is a corporation. The men in charge wear ties, which cuts off blood circulation to their brains. They feel it is more important to be part of a "corporate culture" than to think for themselves. That's why they made so many bad decisions over the last forty years or so.

The people at Tesla actually use their brains. They're not using it to better the lives of every American, unfortunately. They're using it to please the readers of Car and Driver and every balding, post-male-menopausal rich guy out there. If they had applied the same effort to a car that an average or sub-average American could afford, they'd be heroes. As it is, they're nominees for a Ripley's Believe-It-Or-Not article, nothing more.

[DontTreadOnMe]

4. Sports cars are not all about TOP SPEED

It's the feel of driving a car that handles well, and can accelerate very quickly, while still remaining under the speed limit, like when passing a trick on the highway.
The Tesla cars have very good ratings in both these categories.

Most people who own Ferraris are not driving 150mph... and that goes the same for Mercedes or Corvettes.

[tomreedtoon]

9. Come near my college and say that with a straight face.

Alafaya Trail, running up next to the University of Central Florida, has lots of rich kids driving these cars. They ARE going 150 MPH. That enables them to pass the kids with pickup trucks going 85 MPH. The speed limit on Alafaya is 45.

Night racing is popular in other parts of the city. Kids watched <i>The Fast and the Furious</i> and its dumbass sequels and believed they were documentaries and how-to instructional films.

And what does handling, accelerating and making turns do? It makes you go FASTER. This is something nobody needs.

[rollingrock]

5. The Tesla Roadster is a game changer, revolutionary production car

The Tesla Roadster completely shattered the widespread public myths about electric cars being slow, impractical, having limited range, etc. The car isn't just competitive with gasoline cars performance-wise, it has blown them out of the water. All while getting far superior gas mileage. This car has turned the conventional thinking about what a car can do on its head and paving the way for the public's acceptance of the electric car.

If you can't see the tremendous contribution this car has made, then you're the one who is insane!

[tomreedtoon]

10. And it costs so much you need to be a CEO to buy it.

It isn't changing the game at all. It's playing the same stupid game that race cars have always played. It's just a different color of dice being rolled; electric blue instead of black gold. And, as if you didn't know, the public is not invited.

[rollingrock]

12. You can't be that ignorant

new technology is always expensive when it is first introduced. economies of scale bring the price down over time as the demand goes up and the production techniques improves. that's true for any technology. that's how it works for ANY new technology. Tesla is already getting ready to introduce an electric 4 door sedan that costs about half as much as the Roadster. Prices will just keep going down in the future.

[tomreedtoon]

14. Well, let me know when human beings can afford it.

But don't go crowing about a technology that only rich traitors to the American Dream can afford.

You might learn something from computer people. You never get the first version of a new Windows AND you never get the first update to that version. The people who do that get burned.

Or, as someone wise once said, "Never be a pioneer. It's the earliest Christian that gets the hungriest lion."

[rollingrock]

17. 'Rich traitors'

:rofl:

[tomreedtoon]

21. Oh, so you LIKE job-destroying executives? And laugh?

You should really be on Free Republic with that stuff. You already seem to have a strong tolerance for nonsense, vis-a-vis expensive, pointless toys for impotent old men. It's only a short jump to Kenyan birth certificates, lazy welfare mothers and union workers, medical death panels and Socialists marching with instructions written on the back of highway signs.

Go ahead, make the jump. I can tell you're willing.

[wtmusic]

18. Tesla is a boutique automaker

which would get swallowed like a Christian by a lion if they went up against Toyota, so they did what all marketing pioneers do first - idenitified a niche market - and they've become somewhat successful doing business in it.

But they didn't stop there - they've rolled out a $50,000 sedan, and with a little support it's only a matter of time before they have a sedan that's competitively priced with anything the big automakers have to offer. As well as creating lots of jobs for Americans.

More power to Tesla.

[NNadir]

8. Um, it's not nice to mess with religion.

The Tesla is the savior of all mankind. It is the most important environmental initiative in all of history. It is the best thing ever. It is more important than food, justice, ending war, ending poverty.

It is the greatest thing ever.

It's a...a...a...car.

We should all kill to have our cars. What's wrong with you? Don't you get it? It's a car.

A CAR, DAMMIT.

Food, air, water, those are optional but we must have our cars.

How do I know. I read it right here on DU.

[Name removed]

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[Name removed]

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[wtmusic]

19. Questions

Do you really believe it's possible to persuade society to do away with the automobile?

If they're here to stay and we can't make them ultimately sustainable, can we make them sustainable longer without internal combustion?

[excess_3]

11. the poor fuel economy in the US is not caused by oversized engines,

it is caused by oversized people, the lame, and old...
who can't get into a car that you 'fall-down' to get in.
..................................................
then you get ( real problem, they are fat) people buying a SUV
that you step up into.
"hey look, I am an outdoorsman, look at my off-the-road-vehicle"
yeah right
................................................
I work at a rent-a-car place, BTW.

[tomreedtoon]

15. I ain't small and I drive a Toyota Camry.

I grunt a little bit when I have to get out, but the exercise does me good.

I have a friend twice my weight and he drives a Saturn sedan. He has legs with no sensation because of a damaged spinal cord. HE has no problem with his little car, other than he can't afford to really get it fixed. HE grunts when he gets in and out. He doesn't mind and likes the fuel economy.

If you're fat, accept it or work on it. Sheesh. There's no reason for anyone to buy or drive an SUV.

(The one time I had to take a lot of people on a long trip I rented a van. It was packed to the gills. The only excuse for a big car.)

[wtmusic]

3. If GM reissued the EV1 with an Li-Ion battery pack

and they could sell it below $30K it would be an instant sensation.

Methinks contractual obligations prevent that from happening. (cue OKIsItJustMe).

[IDemo]

6. The ironic thing about the EV-1 and Tesla -

The control electronics for the GM Impact, which later became the EV1, were designed by Alan Cocconi - the founder of AC Propulsion. Tesla is using technology licensed from AC Propulsion.

[IDemo]

7. I'm not so sure about the Tesla as a model for future EVs

I think they put all their eggs into a very sophisticated and expensive Li-Ion battery pack. Don't get me wrong - this is a work of art, with 6,831 lithium cells connected in multiple arrays, all controlled with a state of the art battery management system. But, as one might expect, that complex battery system is the single costliest component by far of the vehicle and will require eventual replacement.

With the introduction of the Nissan Leaf, I feel the best EV model has been unveiled: The base vehicle - with chassis, motor and control electronics, is purchased outright. The Li-Ion battery pack is leased, so the initial expense is reduced and battery recycling becomes an issue for the company, not the car owner. I fully expect this to become the norm for the foreseeable future.


But that is one heckuva battery, Tesla.

[wtmusic]

20. IMO it was more a case of limited resources

Back when Tesla was founded, the single hardest part of getting an Li-Ion car battery to work was safety. Connecting 6K safe, little batteries together was actually easier than making a large format battery that wouldn't turn the car into a smoldering heap in an accident.

Now that that nut has been cracked, Tesla will be shopping for affordable, large-format technology to power their cars if they want to stay competitive. Whether they can find it is another matter.