Tesla Turns A Corner -- And A Profit

Discussion in 'Stocks' started by melanie911, Aug 11, 2009.

  1. Tesla Motors -- the flashy electric automaker capable of evoking schadenfreude in even the most enthusiastic EV fan -- met two major milestones in July: the company sold a record number of Tesla Roadsters, and perhaps more importantly, it netted $1 million on $20 million of gross income.

    In all, the company sold 109 Tesla Roadsters in July, and we'll assume that included in that number are at least a few Tesla Roadster Sport models, which the company began delivering last month. (The standard Roadster rings in at $101,500, while the Sport model retails for $120,000.) Tesla credits its newfound profitability to reduced costs and higher profit margins on existing vehicles, likely due in part to economies of scale. It's interesting to point out that the company has stayed in the black even while opening new showrooms; on the other hand, if the company had made the jump to San Jose as intended, Tesla's profit story might've turned out differently.

    No word on what's brought about the increase in Roadster sales. It's unlikely that the Cash-for-Clunkers buzz boosted the numbers on such high-ticket vehicles. However, the company's new vehicle-financing program -- coordinated through Bank of America and announced in July -- may have had a very direct effect.

    It's nice to have some good news from a company that's been riddled with controversy lately. Despite the hot air we often get from Tesla's outspoken executives, the company's goal of developing stylish and (eventually) affordable electric automobiles is laudable -- if for no other reason than it's making major automakers sit up and take notice. We just hope that Tesla's current round of legal problems don't put a damper on its profit-positive trend.

  2. True, but the article I read on Tesla said there are a lot of expenses looming, also factoring in the huge contract they got for battery work from the government. This profit may have nothing to do with the next few year's performance. On the other hand, it MAY continue. No one is sure.