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Tesla Motors Turns a Profit For the First Time 248

Posted by Soulskill
from the even-a-blind-squirrel dept.
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.
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Tesla Motors Turns a Profit For the First Time

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  • by Deadstick (535032) on Saturday August 08, 2009 @10:52AM (#28995891)
    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

  • by SerpentMage (13390) <[ChristianHGross] [at] [yahoo.ca]> on Saturday August 08, 2009 @11:02AM (#28995937)

    What the heck is your problem????

    Don't you find it good that a company in CALIFORNIA manages to turn a profit on new technology? If the company had to reinvent the wheel on batteries, motors and everything else they would be years from a model and profit. This is why GM's electric system is so far behind. They have to invent everything themselves. And what results is a crappy car called the volt, which is not even completely electric. It reaches 40 miles before needing juice. GIVE ME A BREAK...

    BTW China is starting to honor IP... Why? Chinese companies are starting to sue Chinese companies for stealing of their IP.

  • by rednip (186217) <rednip.gmail@com> on Saturday August 08, 2009 @11:08AM (#28995963) Journal

    I see a profitable road ahead for Tesla if they can keep building cars people want to buy.

    There fixed that for you.

  • by BadAnalogyGuy (945258) <BadAnalogyGuy@gmail.com> on Saturday August 08, 2009 @11:12AM (#28995981)

    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.

  • by Anonymous Coward on Saturday August 08, 2009 @11:12AM (#28995983)

    This is slashdot, if it is not an Apple product made in China, then it is not worth bothering with.

  • by smallshot (1202439) on Saturday August 08, 2009 @11:13AM (#28995985)
    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?
  • by MtHuurne (602934) on Saturday August 08, 2009 @11:17AM (#28996003) Homepage
    Do people actually take Top Gear as consumer advice? I watch it for entertainment; I don't even have a car.
  • by FooAtWFU (699187) on Saturday August 08, 2009 @11:25AM (#28996033) Homepage
    It's "green". Duh.
  • by Frosty Piss (770223) on Saturday August 08, 2009 @11:30AM (#28996049)

    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.

  • by Anonymous Coward on Saturday August 08, 2009 @11:37AM (#28996087)

    because they're expected to become more profitable in the future, dumbass.

    If you'd ever tried to play restaurant empire, simtower, simcity, or the sims, you would understand this.

  • by Vellmont (569020) on Saturday August 08, 2009 @11:38AM (#28996091)


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

    The same way the banks got billions of dollars of loans that LOST billions of dollars. A failing economy.

    You're right that it doesn't make a lot of sense from a loan perspective. But I at least feel better about money going towards developing a product that may help out ongoing energy problems than it going towards lining the pockets of investors and million dollar bonuses for bank executives.

    The whole thing is part of the economic stimulus of the economy. The idea being that in a down economy nobody wants to spend money.. because the economy is down (so the process self-perpetuates). The only entity that can afford to spend a lot of money in a down economy is The Government. The massive government spending that occurred to produce all the crap for WWII is the only thing that got us out of the depression.

  • by ucblockhead (63650) on Saturday August 08, 2009 @11:51AM (#28996163) Homepage Journal

    Because it is extremely doubtful that Tesla Motors will make a steady $1 million every year for the foreseeable future. There are two likely scenarios.

    1) Tesla will be successful, and rapidly expand into a moderate sized care company, where $100 million in profits in a year is reasonable.
    2) Tesla will go bankrupt.

    For a startup, it is more about projected profits than current profits. At this stage in its growth, Tesla should not be concerned about profits at all. Best case for it is to funnel all money into growth and have $0 in profit.

  • by siriuskase (679431) on Saturday August 08, 2009 @12:00PM (#28996219) Homepage Journal
    IDK, fabless chip manufacturers are still chip manufacturers, so why not a car manufacturer that outsources all its factory work?
  • by tomherbst (888500) on Saturday August 08, 2009 @12:00PM (#28996221)
    Telsa has a valuation in the billions of dollars. The way they pay back the loan is by having what the VC's call a "positive exit" - the company going public or being acquired by a larger company. Even growing organically they could do it - they are manufacturing constrained right now, the loan is all about expanding manufacturing. Personally, I would have rather seen the gov't broker a deal for Telsa to use the NUMI manufacturing plant in Fremont rather than get big gov't loan to build a new plant at the same time they are giving Toyota a bunch of incentives to keep NUMI open after GM walked. If I fit in the roadster, I'd want one. Got a ride in one and it was wicked fun. 0-80 in half a block.
  • by Vellmont (569020) on Saturday August 08, 2009 @12:03PM (#28996249)

    I don't completely disagree with you, but you might want to take price into consideration as well. The Model S is supposed to retail for $57,000. The Volt is supposed to retail for $40,000. Both have a $7500 tax credit attached to them.

    Which do you think is more affordable for the average person? A $33,000 car, or a $50,000 car? Neither is an acceptable answer, but at least the Volt is in the ballpark.

    A 40 mile electric charge range ain't bad. On most days I don't drive more than 40 miles, and I commute to work every workday. If I were making the choice between them, I'd easily choose the Volt over the Model S and do something else with the $17,000 in savings (hell, you could buy a whole other car for that if you were so inclined). In reality I'll buy neither of them, but at least it's a start.

  • by BadAnalogyGuy (945258) <BadAnalogyGuy@gmail.com> on Saturday August 08, 2009 @12:09PM (#28996269)

    That's already the case for many makes and models.
    http://www.magna.com/magna/en/ [magna.com] (for example)

    What game-changing idea does Tesla really bring to the table? What idea would let them survive in the competitive car market?

    Their market isn't automobiles (or even sports cars), it's electric vehicles. There would need to significant financial incentives for Tesla to become a serious contender in the automobile market. Asit is, there is a little incentive to buy a greener car these days, but not enough to cover the gap in price.

  • by Macrat (638047) on Saturday August 08, 2009 @12:20PM (#28996323)
    Yeah, they can pay off the "loan" in 464 years.
  • by Anonymous Coward on Saturday August 08, 2009 @12:42PM (#28996461)

    I noticed a lot of negative comments but the news was amazing. We aren't even talking 18 months after they delivered their first car they showed a profit! I've never heard of that from anyone in recent history. Breaking even for a car maker takes years not months. Yes I know it's not a true profit to the investors but that was always going to take years, probably 5 to 10 years and they all knew it. Ask any investor if they are happy or disappointed and I'll bet you couldn't wipe the grin off their faces. I've seen claims Tesla won't survive 3 years get modded Insightful. I'd mod it shortsighted. Dan hasn't peaked yet so declaring their death is a little premature. They are doing the right thing and expanding their car line to more afordable models. They are partnering up with established companies. They seem to be doing all the right things to not only survive but thrive. People have called the roadster expensive but haven't pointed out that it can beat a car costing twice as much in the straightaway. Once batteries get lighter they'll corner better and they can beat them in the corners as well. People say electrics must be cheaper to be acceptable because of range and recharge limitations. How's half priced for cheaper? Yes they can't make a family car cheaper and they probably never will. The range and recharge will improve over time. You've got to remember a Tesla car is exactly the same as a hydrogen car it just uses batteries instead of a fuel cell. The cars could use fuel cells just as easily. The batteries are the major expense. Electric motors tend to be cheaper than gas engines and they lack all the extra bits like fuel pumps and such to keep them going. How much geekier can you get than an electric car??? Time to celibrate. Also you've got to remember the single biggest point. They did it in the middle of the worst economic downturn since the Great Depression! Two out of the big three car makers just declared backruptcy!

  • by hey! (33014) on Saturday August 08, 2009 @12:43PM (#28996471) Homepage Journal

    By applying.

    Ford got 5.9 Billion, and they expect to lose money this year. They're going to retool their factories. The Telsa loan is in some ways less risky, since we're not betting on the survival of an industry that is, on it's own, dying in this country: building ICE automobiles.

    Everybody in the auto industry is in bad shape. The idea of the loan program isn't just to stem the cash bleeding until the next economic upturn, but to reclaim technological leadership. The 465 million is supposed to result in something that has eluded us for years: a practical, competitively priced electric vehicle. That may not be the answer to all our prayers, but it will give us us some answers about personal transportation in a post petroleum world before the lack of answers becomes a national crisis. That's well worth the opportunity cost on the 465 million dollar loan.

  • by Jeremi (14640) on Saturday August 08, 2009 @12:44PM (#28996477) Homepage

    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 [teslamotors.com], 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.

  • by Lonewolf666 (259450) on Saturday August 08, 2009 @01:09PM (#28996667)

    So far, they sell one nice electric sports car. And they announced to make a sedan for a somewhat wider audience. But Tesla does not have the market share yet to put real pressure on the major car makers.

    I think Toyota played a bigger role there:
    While only partially electric, their Prius demonstrated that a hybrid can actually sell serious numbers. AFAIK one million worldwide so far.

  • by Bobby Mahoney (1005759) on Saturday August 08, 2009 @02:18PM (#28997175)
    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.

  • by edalytical (671270) on Saturday August 08, 2009 @02:28PM (#28997235)

    Right, that's what has been holding the electric car back, "efficient drive-trains".

    If you think the drive train adds anything significant to the car's "efficiency", then I have a perpetual motion machine to sell you.

  • by Nethemas the Great (909900) on Saturday August 08, 2009 @02:37PM (#28997287)

    ...but they make no financial sense. $109,000???

    You also miss the point entirely. The roadster was never intended to be economical. It was intended as a tool to persuade the masses that electric is cool. It was intended to provide a flexible platform on which to develop their technology while retaining the financial flexibility afforded by a sexy roadster tailored to appeal to financially enabled early adopters. Their next vehicle, a luxury sedan, is built upon the technology developments made through their roadster project. The sedan is effectively half the price and is put within reach of many working professionals and also giving it economics not far removed from a Prius. In addition, they're now licensing (manufacturing?) their roadster developed technology to other manufacturers. They're following the traditional path of new technology developments. Early adoption of new technology almost never makes financial sense. The horse was most certainly more financially sensible than the Model T but without the early adopters of it you wouldn't have that $9,000 gas guzzling pile, just a lot more manure.

  • by Dragonslicer (991472) on Saturday August 08, 2009 @03:19PM (#28997573)

    Really, where can I plug in my electric car when I go on vacation 100 to 200 miles from home?

    You vacation someplace that has gas stations but no power outlets?

  • by Mitreya (579078) <mitreya@gmailCHICAGO.com minus city> on Saturday August 08, 2009 @04:12PM (#28997943)
    Tesla Motors lives off government money and makes toys. Funding research to make toys is one thing, but now we are funding manufacturers.

    What are you talking about?? Tesla Motors does not live off government money. GM and AIG do. Tesla Motors borrowed money from the government. And now that it is turning profits the chances of it paying the money back are higher than ever. That's what bailout should do -- lend money to companies that are viable and will even pay that money back! (As opposed to the companies that will use up the money and go bankrupt (GM) or continue sucking money down without being useful (AIG)).

  • maintenance (Score:2, Insightful)

    by zogger (617870) on Saturday August 08, 2009 @04:28PM (#28998101) Homepage Journal

    Another good thing about renting a vehicle for long trips is peace of mind. You aren't adding excessive miles to your own car, plus the rental company is 100% there for any potential breakdowns, etc. In your own vehicle, you could get stuck a thousand miles from home and have to eat expensive repairs, parts and labor. Closer to home, like normal just get a cheap tow in and fix it yourself, save a lot, only pay for parts.

  • by Bigjeff5 (1143585) on Saturday August 08, 2009 @05:19PM (#28998501)

    It's $1,000,000 more profit in a year than any other US car company made, and the rest didn't just get loans, they got free money too. Except Ford, they just took the loans. They still didn't make any profit though.

  • by fractoid (1076465) on Sunday August 09, 2009 @09:22AM (#29001911) Homepage

    Insist on spending the whole $109k? The ZR1 Corvette will embarrass the Tesla by any meaningful performance metric.

    Fuel economy? >.>

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