I can’t be the only one that thought Tesla was going to be a money pit. I foresaw greed, mismanagement, delays, so on and etc, but they seem to have delivered and are now on their way to full-fledged “successful business” status. A million dollars’ profit on 20 million in business is small potatoes in the car industry, of course, but the other guys in the game are all wallowing in debt, so anything less than total self-annihilation would have put Tesla ahead of them.
Things are looking rosy for the company. They got a fat loan from the government, they’re coming out with two new models (the Model S and the Roadster Sport), and the electric car business is getting bigger every day. While I plan to buy an electric from one of the majors when they finally get around to it, I’ll feel indebted to Tesla for helping pave the way.
[via El Reg]
Does this count all of the money the government gave them, or was all of this actually the result of selling expensive, impractical cars?
the second one.
It could still be due to the money the government gave them. They might have had to spend $50 million on buildings/machinery/etc. but accounting might have only shown 500k as being “used” during this period. I know this isn’t a finance/accounting site, but we need to acknowledge the clear distinction.
“but the other guys in the game are all wallowing in debt”
Eh… Tesla’s got $450M in debt owed to the energy department alone. I’d say that they’ve got a decent bit of debt to pay off.
Also, remember, this does NOT mean that they ended up with more cash this month compared to last month. Earnings are separate from cash flow, because earnings are adjusted with depreciation on the assets that they put money into.
Earnings, in my opinion, are harder to analyze simply because with lots of long terms assets, there’s more room to “fudge” numbers or make things look better than they are.
I’m not saying that this is the case, but I just want to point out that it might not be as great as it sounds when they say they’ve turned a profit.
And it’s not even much of a profit! :)
But at least the government loan is one of these cushy long-term deals. If Tesla can scale its business up, they can pay it back in any number of ways within five years.
“the other guys,” though, have billions in toxic assets, unusable labor and manufacturing, and backlogs of unsold cars.
It’sa profit if you want to call it that it’s not much at all. They’re lucky the government is jumping behind electric cars with Obama putting aside billions for it. Hopefully Tesla can stick around and actually lead the wave in upcoming electric cars. Who knows, they may end up being one of the leaders in car manufacturing in a few years (I’m getting ahead of myself here). http://ziggytek.com/
Yes they’re the style leader when it comes to hot electrics, but even these cars will never be widely used until the technical hurdle of delivering a full recharge to their batt system in the same, or less time than it takes to pump gas into a car has been leaped.
Lets put this into perspective here…
1. Tesla is making the only highway capable EV that you would want to take a date out in.
2. Of course 1MM profit is nothing to brag about, and of course this is not their earnings, just cash flow. The fact that a start up automaker producing a new technology that everyone 5 years ago said was ‘not feasible’ is impressive… especially when the rest of the auto industry is just trying to stop the bleeding!
3. The Roadster Sport goes 0-60 in 3.7 with a 240mi range… that is Ferrari acceleration, and if you have been lucky enough to test drive one (which I totally recommend!!!) it feels like a jet take-off… instant torque and a linear acceleration. The rest of the planned EVs (because they are all still in prototype phase) look like the lovechild of Kermet the Frog and a PT Cruiser with pathetic performance.
4. If you understand economics with a new technology, you must start on the high end, low volume and work to higher volumes when economies of scale drive the price of the technology down. The next car from Tesla is the Model S, which looks hotter than the Maserati Quattroporte with a Jaguar XF price tag.
5. Seriously, would you really have expected a start up EV company making a $100k sports car could survive the Great Recession?
Tesla embodies the American dream and our innovative spirit… we should all take great pride in this company as they are redefining human transportation while reviving the passion for American cars that has not been seen since the 60’s!!!
Even with a balance sheet of $450MM debt to Uncle Sam they are still more profitable than the big 3.
But how is that a profit when you are venture-backed, awe $450 to the government, and no one has yet to own the product?
The profit is an “accounting profit.” Again, it says nothing about their cash position.
In terms of venture capital and the money they owe the government are in forms of debt and stock. Those do not impact their earnings, except for interest to service the debt. That said, they can have earnings even if they’re taking on more and more debt…
A full recharge in minutes using Ni-MH batteries has already been achieved by Toshiba on notebooks.Ni-MH baterry technology from GM Ovonics has been bought by Chevron and forbid usage in all electric vehicles.You read between the lines.
RAV4 and GM EV1 vehicles in 1996 had Ni-MH batteries.They were confiscated by the manufacturers and purposely destroyed.
See http://www.ev1.org/chevron.htm
Haha, love the photoshopped picture, and this is great news- after dumping millions of dollars into this, it’s great to see it looking like it’s going to work out. Maybe now, Tesla can put more resources into a less-expensive, less-extravagant, affordable electric vehicle- Which is what we need if we want electric cars to have any positive effect on the environment, national security, the economy, or our pockets. To learn more about 100% electric cars, and why they are the best transportation option for our future, check out http://www.twocentspermile.com or http://www.bit.ly/2centspermile