Tesla Motors Turns a Profit For the First Time 248
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.
First... (Score:5, Funny)
...year of profits!
Re:Customer is a sucker... do the math (Score:5, Insightful)
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.
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It's actually a terrible deal, considering you can buy a used Lotus Elise for under $40,000 USD, and then add a turbo kit by Force Fed for around $10k. That puts it in the 4.0 or less area for less than half the cost of a Tesla.
Similarly, a BMW 1 or 3 series (x35i) with modified boost will run at those speeds, for even less. You can pick up a base 135i for under $40k, then add in a JB3 un
Re:Customer is a sucker... do the math (Score:5, Insightful)
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)).
Re:Customer is a sucker... do the math (Score:5, Insightful)
Insist on spending the whole $109k? The ZR1 Corvette will embarrass the Tesla by any meaningful performance metric.
Fuel economy? >.>
Re:Customer is a sucker... do the math (Score:4, Insightful)
...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.
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'profit' can mean different things (Score:5, Interesting)
Re:'profit' can mean different things (Score:5, Interesting)
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.
SOP for startups (Score:2)
This is a standard accounting operating procedure for Silicon Valley startups. In fact, compared to the late 90s "boom", this is positively conservative.
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If you spend $10 yesterday to make $11 today, but the dollar today is only worth 90% of what it was yesterday, you did not make a $1 profit, you took a $0.1 loss.
It's not funny money, it's real buying power. Granted, had you not done anything you would have lost $1 in buying power instead.
This is called accounting. You should learn a little.
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He's right, if you were to ask a joe sixpack to calculate EBIT, they would probably not take into account "fictional" (purely accounting) costs. Moreover, EBITDA matches the "flow" idea of money more (going in the cashflow direction).
Sigh... then we're in agreement that it's NOT profitability, but cashflow. Do you know the difference? Does Joe Six Pack?
If I shut down a business and hold a liquidation sale, I could be "cashflow positive" for a while. That is not profit. It is grossly misleading to pretend yo
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I'd take it with a LOT of skepticism. They shipped 109 cars in a month, which probably means they booked the revenue for those cars in that month. But they probably didn't make (and thus book the costs of) anything like 109 cars in that month. So it's just a blip.
Re:'profit' can mean different things (Score:4, Insightful)
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Right. I saw it, and I always loved the Elise. You can't get more fun per dollar with any other car. It fits in every parking space, looks very cool, has an insane acceleration, gets around the corners like a dream, and still is pretty cheap for such a sports car. The only thing lacking, is comfort. The perfect second car, if you got a bit more money to spend. Or my first car. Because I'm a MAN. ;)
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You can't get more fun per dollar with any other car.
Unless you're 6'4", then you can't get more cramps with any other car. The Elise is probably the only reason I wish I wasn't tall, but I guess you can't have everything in life.
their car was panned HARD on Top Gear
hahaha, that's like relying on any of the cable news stations for clear and accurate news.
Re:'profit' can mean different things (Score:5, Informative)
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 (Score:5, Informative)
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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.
It's not "positive cash flow while being given $465 million" then?
Re:'profit' can mean different things (Score:4, Insightful)
465 Million $ loan?? (Score:5, Insightful)
Re:465 Million $ loan?? (Score:4, Insightful)
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Exactly what I was thinking!
Why should I pay taxes to give $465 million dollars to a company that GROSSES $20 million a year?!
I guess my big mistake is not having a company that knows how to play the government game and get people to fund my pet projects.
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Why should I pay taxes to give $465 million dollars to a company that GROSSES $20 million a year?!
Ideally, the company will make enough of a profit in the future (I'm using the old-fashioned definition of "future" of a few to maybe even 20 years, not the new corporate definition of "this quarter") that they can pay back that loan. Not quite as ideal, but still not bad, is that even if they don't end up paying back the entire loan, the technology that comes out of it will save more than $465 million in fuel use and environmental cleanup. Whether or not either of these outcomes actually happens, of course
Re:465 Million $ loan?? (Score:5, Insightful)
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.
it ain't easy being green... (Score:2, Interesting)
I at least feel better about money going towards developing a product that may help out ongoing energy problems
Just because its all electric doesn't mean it will solve our energy problems. It just offloads the burden to another infrastructure. Currently our use of fossil fuels is generating most of our electricity, dump a few million electric cars on the grid and sure you save some gas and emissions (and coal plants have much better filtration and carbon capture than combustion engines) but at the cost of stressing our electric grid. The efficiency of converting gas into kinetic energy is relatively high, as far a
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Re:it ain't easy being green... (Score:5, Informative)
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.
except that nuclear plants are local (Score:3, Interesting)
No need to fight wars for a nuclear, or solar or wind energie or geo-energie.
That is the beauty of the electric grid. it don't give a damn what you hook up to it.
Petrol cars run on petrol.
Electric cars run on anything that pump out juice.
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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
No really. A power plant is far more efficient at converting energy into a usable form than a gas-combustion engine. Power plants are in the range of 36-40% efficient. An internal combustion engine is around 18-20% efficient. That's a factor of 2 times more efficient for a power plant. Power plants are essentially always going to be more effici
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I would feel better if they were making an AFFORDABLE economical vehicle that would benefit the majority of Americans
I'd feel better too. But look at price for any new technology, and then look at them again 10 years later. In general prices go down drastically. The hope is that the same is true for electric cars.
Think about it this way though. We spent billions of dollars in WWII to make things that literally destroyed themselves and other things, people, and infra-structure. Then we spent billions of
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They aren't getting the loan for making more Tesla Roadsters... but for their new Tesla Model S sedan [autoblog.com]. Which is a lot more affordable (and useful) than the Roadster. Still more pricey than a normal car, but it's definitely going in the right direction.
It could even be a hit here in Norway, as it will be exempt from all normal car taxes (which easily make most cars 2 times or more expensive than in the US) - it will even be exempt from the VAT (25%). Exporting US cars again would be nice, wouldn't it?
Re:465 Million $ loan?? (Score:5, Insightful)
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.
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While Tesla does not make affordable cars, they have a clearly stated desire to make such cars as soon as they can reach the appropriate manufacturing scale. This pushes affordable cars more than you might think. The big auto makers see operating profit on Tesla's books and a well respected brand so they have to counter or face the possibility that Tesla may one day own the electric car market.
Ironically, government investment into Tesla creates more incentive for other auto makers to step up to the plate
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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?
The same way that companies that make billions in losses get billions of loans from your government, I suspect...
Re:465 Million $ loan?? (Score:4, Insightful)
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.
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Re:465 Million $ loan?? (Score:5, Informative)
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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
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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?
Imagine you have an account at a bank that has unlimited ability to borrow money from other banks. Now imagine that bank actually borrows money from other banks to pay the interest on the previously borrowed money. It's not a problem for the bank because if the interest payments get too large, the bank can---and will---borrow still more money. Now say you ask to borrow money from that bank. The amount is less than an hour's worth of revenue (real and borrowed) for the bank. If you default on the loan,
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Because their planned expansion and the new model(s) they're developing will allow them to repay the loan.
I made $50k last year, my first year of production. My business is growing. My business plan is a.) viable b.) verifiable c.) shows I'll likely make $100M over the next decade. I need $10M for a building, tooling, R&D, and to cover short-term costs while ramping up. Does the bank turn me down because I only made $50k last year?
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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.
It's actually impressive folks (Score:3, Insightful)
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!
Not bad for a startup. (Score:3, Interesting)
They've spent far less money than GM spent on the EV-1, and have almost as many cars on the road. About 1100 EV1 cars were produced.
The current version of the Tesla roadster is a reasonably good sports car. Speed is good, acceleration is very good, the range is 200 miles, and it looks good as it whooshes by. It's overpriced, but there's hope of getting that down as volume goes up.
They had some initial problems stemming from trying to make it go fast. First they had motor overheating problems at high revs, so they put in a two-speed transmission. That was a disaster; shifting under load ate up the transmission because the two speeds were too far apart. Then they went back to a simple single speed transmission, but water-cooled the motor, which simplified the mechanics and got them the desired top speed. The current drive train seems to be holding up well. Top speed is only 125MPH, which is low for $100K+ sports cars, but few customers really take their Ferraris to a track anyway.
I see Teslas on the road almost daily. I live near the Silicon Valley dealership and on a road the sales reps use for demos. They change lanes very smoothly, with all that battery mass holding the center of gravity down.
Re:Private property. Keep out (Score:5, Insightful)
That would seem to be a fairly accurate definition of "patent"...
rj
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I think that by that part he meant that a patent usually costs money [cbs5.com].
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Well, you'll have to explain the logic behind that. You borrow money, you develop a product, you patent it, you pay the money back and you own the patent. You weren't "granted" anything: you took the risk by borrowing money, and you get the proceeds from the patent you gambled on.
Unless, of course, you fail to pay the loan back -- in which case you're bankrupt and the lender winds up owning the patent. Venture capitalist loan, government loan...what's the difference?
rj
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But I can if I must: So far, Tesla Motors have produced 1 product: the Tesla Roadster. This is a 2-seat, $100k+ vehicle. I don't care that it's electric -- it's an ultra-high-end luxury product. The money is from a "fund to develop fuel-efficient vehicles". What if I'm developing an electric yacht? Can I get some of that grant money then? I'm sure they showed nice slides of
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I'm sure if you can demonstrate fully working and "mass"-producable version of your electric yacht, an interresting patent portfolio, big name industry partners, a list of customers and a realistic business plan too, you will also get part of that grant money.
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I see a profitable road ahead for Tesla if they can keep building cars people want to buy.
There fixed that for you.
Re:Private property. Keep out (Score:5, Insightful)
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.
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Their market isn't automobiles (or even sports cars), it's electric vehicles.
And electric vehicle technology. If Tesla gains enough mindshare then the big automakers will be falling over themselves to release EVs. Also, Nissan has pledged to deliver an affordable EV to the North American market by 2010. I figure they're looking to be to EVs as Toyota is to Hybrids. It will be interesting to see how that works out for them given Toyota's successful past (and present) with the RAV4 EV.
There would need to significant financial incentives for Tesla to become a serious contender in the automobile market.
Like the fat loan they got to boost manufacturing capacity?
Asit is, there is a little incentive to buy a greener car these days, but not enough to cover the gap in price.
The wealthy will buy it for the performanc
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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.
You remember last year when we had $4 / gallon gas? If you don't think that's going to be back by this time next year and that 3 years from now the cost will get to at least $5 / gallon, then you're living in la-la land. The financial incentive is coming in fast.
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Ok, you know they are Electric cars right?
Except in places where the infrastructure is already near capacity (California and some parts of the northwest spring to mind), the infrastructure is already in place, and all anybody really needs is the correct outlet.
Infrastructure for these things is no problem, except in places where the electrical infrastructure is already poor.
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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?
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I was responding to someone who said that Tesla was not going to be making cars in 3 years. I believe that if Tesla is not making cars in 5 years, the advent of the electric car will be indefinitely delayed.
The type of people buying Tesla's are the type of people that it is cost effective for companies to take a loss on charging statio
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Someone should invent some sort of electric meter, and charge based on usage! OMG, this is brilliant!
I'm gonna sell this idea to the power companies, since obviously right now they can only be guessing at usage, this is way more efficient!
Seriously man, metered power is old news, really old news. It's relatively simple technology, hell you can buy a meter to monitor your power usage for a single device in your home for at most a couple hundred bucks. Here [powermeterstore.com] are some consumer models ranging from $45-$220. Ch
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Shoulda clicked a few more links before posting, here are the commercial grade products, meant specifically for applications like charging for power usage.
They run around $500, a very, very easy investment to make. Charge a 10% premium on the power (more like 50%+ while it's still a novel thing) and you've got a new revenue stream.
Like I said, power metering has been around a long, long time. It's not some new pie-in-the-sky idea.
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I didn't say that new technology was needed. I said that the infrastructure needed to be installed. Can you tell me where, TODAY, I can plug in my electric car and recharge it while on the road? On the East Coast of the U.S.?
Until those facilities exist, the average person is not going to buy an electric car. As more early adopters and other special characters (who are the target demographic of Tesla) buy electric cars, more places wi
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http://www.powermeterstore.com/c629/revenue_and_billing_meters.php [powermeterstore.com]
Oops.
Always preview.
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maintenance (Score:2, Insightful)
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.
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A thing to remember:
Tesla makes more money than all the other 'major' companies combined.
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Tesla also has a revered brand for which people are willing to pay.
On the manufacturing side they are some advantages as well. They have very few long term commitment contracts with suppliers who make parts that are irrelevant to electric cars. They are very few if any long term commitment contracts to labor organizations to keep organizational charts wide and heavy. They have few if any long term contracts with city, county or state governments regarding factory locations or employment levels. They hav
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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.
O, how I hope you're wrong. I hope I am not merely naive. The Model S appears to be one heck of a car. I have long dreamed of a purely electric car. If they are successful with it and the price drops ~$15,000 (due to improved manufacturing efficiency), I think this car could become very popular and make a huge impact in the car industry.
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The Model S looks to be more in line with a decent BMW than a more affordable vehicle. Tesla's plan from the beginning has been to develop their tech on the markets most able to support them - first the people with cash to burn, for whom $100k+ for a status symbol seems like a good deal (and who can lay down a $30k deposit and let it ride for a year or two). Next they target the "well off" folks, who could maybe swing a Roadster but don't really have money to burn. They can afford nice cars, and would se
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Unless you're suggesting they're doomed to fail, despite being flush with cash and profitable in the middle of a recession?
Outsourcing (Score:3, Informative)
They don't even manufacture the body of the car they sell.
That's not so unusual. Do you think the big auto makers actually make most of the parts that go into their cars? They don't. In fact it is standard practice to outsource even entire subsystems of the car to the Tier 1 suppliers. The body of the car is just another part which can be purchased from a supplier if desired. It's less common to outsource that part but not unheard of.
They are an IP company through and through.
So are most manufacturers when you get right down to it. Any sophisticated product not covered by patents and trade secrets wi
Re:Long road behind and more ahead (Score:4, Insightful)
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.
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This is slashdot, if it is not an Apple product made in China, then it is not worth bothering with.
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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 commu
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How about the sub $20K, 100 mile Aptera 2e? (Or if you wait until 2010, the hybrid model that goes 600 miles on one tank?)
http://en.wikipedia.org/wiki/Aptera_Motors [wikipedia.org]
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No thanks. If I didn't care about my safety I'd just buy a motorcycle rather than something that looks like it came from an issue of Popular Mechanics 20 years ago.
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Don't you find it good that a company in CALIFORNIA manages to turn a profit on new technology?
$1mil "profit" after a $465mil "loan" is a profit?
I think you overestimate Tesla's influence (Score:4, Insightful)
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.
Re:Where in the hell do people get this money? (Score:5, Insightful)
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.
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But the carrot is that the technology in these 100k$ cars will trickle down to cheaper, more consumer targeted vehicles.
This is delusional. Sorry but it is. You're not alone and it's the support argument that gets repeated the most. But think about what technology it is that is supposed to magically trickle down: batteries.
Hmm, where have I see those before? I don't know maybe in millions of laptops, cell phones, handheld devices, power tools, calculators, and cars. Nearly everything uses batteries, but good batteries still cost about $100 per pound.
If all those batteries haven't reduce the price thus far why would a car com
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That's my point exactly. The batteries you're talking about don't exist. The Tesla uses standard Li-ions found in laptops and cell phones. There is no innovative technology here. There is nothing to trickle down.
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But think about what technology it is that is supposed to magically trickle down: batteries.
I'm sorry, but if you think batteries are the only trickle-down technology from efficient and well engineered electric cars, you're ignorant. Think more in terms of the entire drive-train.
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Right, that's what has been holding the electric car back, "efficient drive-trains".
If you think the drive train adds anything significant to the car's "efficiency", then I have a perpetual motion machine to sell you.
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Model S is priced at 49.900$
It somehow already happened. Cool, eh.
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To be clear I really hope this does happen. I hope some new battery tech comes out and I really hope the cost comes down. It just hasn't happened and I don't think Tesla is making any headway. As far as I know they're not developing batteries or researching new battery tech. They're using off the shelf batteries and they will not move enough volume to reduce costs. The Model S appears to just use less batteries to reduce the price.
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Seriously, I don't know anyone that could just blow $100k on a car.
You must not know any upper-level managers or executives, especially in high cost-of-living areas like Boston, New York, or Los Angeles. It's okay, though, I only know a couple (I worked at a small company for a couple years, so I personally knew the CEO and CFO), and it's not uncommon for typical employees not to know any.
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Why worry?
People spend money on what's important to them. I spend 2-3 hours per day in my car commuting. I might as well spend some money to drive something I enjoy (It's all highway miles, so it's an enjoyable drive). I can afford it without mortgaging my home. Which is fortunate, as I would move closer to where I work, except that I can't sell my home for a significant fraction of what I bought it for 3 years ago. :-(
My car cost me ~$50K. I do have a close friend who drives a Porsche GT RS. (I think
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It's not *that* far fetched. A successful software engineer can pull down $100-200K per year in the USA, and if s/he's single, it's quite easy to buy a $100K car on that kind of salary.
Err, yeah. There's not THAT many software engineers making >$100K, and if they are, you have to consider that they're certainly in higher cost of living areas and, more importantly, you can expect the number of software engineers getting paid that kind of money to decrease dramatically as jobs are shipped overseas.
There are many people who can afford a $100K car without breaking the bank. On a 5 year loan, financing $80K of the price, it's around $1500/month at 6% loan rate. Plenty of people can do that.
Plenty of highly paid doctors and lawyers, perhaps. But even then they'd probably think twice about it. $1500 a month is more than a mortgage/insurance/tax payment on a $200K house, and you
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Basic accounting does not consider a loan as profit. The Balance Sheet is defined as Assets = Liabilities + Equity. The loan increases cash(assets) and increases liabilities (obligation to repay). Profit appears on the Income Statement. Profit = revenue from sales less expenses of those sales over a defined time period.
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Yes, i know that, and you do, but did they manage to insert the money in there?
Were they loans, or grants that Tesla got?