Silicon Valley’s electric car company, Tesla Motors, says that it hit profitability in July. The private company reports that it made “approximately $1 million of earnings” on revenues of $20 million, and that it shipped 109 Roadsters, its $109,000 all-electric sports car. The revenues reflect GAAP accounting standards and are only for the month of July.
Founder and CEO Elon Musk predicted in June that the company would soon hit profitability at the end of a lengthy blog post dealing primarily with a lawsuit brought on by Tesla’s ousted co-founder Martin Eberhard. In June, Tesla was also awarded a $465 million loan from the Department of Energy, which will help it manufacture its more reasonably priced Modern S sedan.
The $20 million in revenues and $1 million in profits do not reflect any proceeds from that loan, the company tells us.
I knew Tesla was going to be alright when a package of a dozen matchbox cars my son was given for Christmas contained a 2007 Tesla Roadster. At first I thought it was a Lotus, and the writing on the bottom confirmed it was a Tesla.
The fact of the matter is that the Tesla is good for the reputation of electric cars. It took something that is thought of in mainstream society as a large golf cart and pushed the tremendous advantages of electric drivetrains into the faces of motorheads.
Nothing better than sitting at a dinner table with my very conservative family, and when criticism of “anything that don’t burn gas” came up, pulling up the tesla’s specs 0-60 numbers up on a website, and watching them suddenly get excited. That’s huge.
Congratulations Tesla. I hope they get the Model S out soon.
You know the company will be alright if you are way beyond the ages of the target market for matchbox cars, but feel a sudden urge to buy matchbox cars again just to have the Tesla. It may be the closest many of us get to owning a real one, for a while.
This is fantastic. Tesla is a stud of a company. I love their unabashed approach to handling media. Good work Tesla, I’d can’t wait to see the model S on the road and the technology lead to the implementation of sub-$30,000 vehicles for the mass market… well done.
“Tesla was also awarded a $465 million loan from the Department of Energy, ”
THIS IS THE ONLY REASON IT IS PROFITABLE. BECAUSE OF A LOAN.
its a horrible company that just rebadges a lotus elise and adds powerpacks
“The $20 million in revenues and $1 million in profits do not reflect any proceeds from that loan, the company tells us.”
Words, eaten.
Who says govt intervention is bad for company
Good Job Genius. If you read the article, you’d have realized that “govt intervention” had little to do with Tesla’s profitability.
“The $20 million in revenues and $1 million in profits do not reflect any proceeds from that loan, the company tells us.”
company can say any lie since theyre private
You’re correct. The gov’t loan was strictly to replace the private loans for the Model S production facility. The private loans fell through when capital dried up courtesy of the housing crash/investment bank fiasco.
Tesla was a poster child for a company that, although somewhat risky, was a good candidate for capital but couldn’t get it due to an excessive shortfall in supply of bank assets.
seriously, profitable? Something seems fishy here.
I know they are doing things differently than traditional car companies, but startup costs in that sector are high…even for them.
100 * 100 K = 10 M, not 20M
Did they get another 10 M from selling toys?
They probably got it from licensing their battery and/or power train technology to other companies.
Actually, it was 109 * $109K, making the total $11.8M, not $10M.
/nitpick
Wow! Unless they funneled their sharpest minds from engineering to accounting, it’s very good news. Anyhow, many people still take these news with a grain of salt, considering how the rest of automobile companies look at the economics of electric cars.
Interesting — but at these numbers, just the flow of orders and exchange rates (the pound was down big when orders placed by tesla to lotus, so that helps a ton). on other hand, i love that when i go to the old local bar (Oasis) across the street from tesla menlo manse, i get to see the shiny toys.
No!!!! My favorite company in the world has succumbed to the evil profit! What company do we cheer for now?
Elon Musk will do everything to keep Anold Schwarzenegger and Jason Calacanis smiling.
And he will get angry with anyone trying to portray Tesla Motors as unprofitbale
The debate will go on and on; if Goldman Sachs can make it in investment banking in such a bad economic climate, why should Elon Musk fail, some may ask!!
I hope this company succeeds because we need cars with good gas mileage and style.
Not sure how it is in States but in Europe electic cars doesn’t burn any gas.
Actually, most electric cars here do burn gas (natural) or worse, coal.
I’m looking forward to electric cars taking over, but only AFTER the energy powering them comes from something other than burning fossil fuels or coal.
Until that day, we’re better off with fuel efficient dino-burners and just plain driving less.
Wrong. Electric cars are inherently far more efficient. Centrally generating power and sending it along electric lines to a car’s batteries is far more efficient than making gas from oil, distributing it, and then burning it in a 20% efficient combustion engine. Get your facts straight. There’s a reason they say the Tesla gets pver 100 mpg equivalent.
wow, $.5 billion from DoE
Musk is incredible at getting tax payer money with private enterprise. Thats more foresight than Taleb had about where the economy was going . ..
Look at his private space venture, he’s aiming for billions from tax payers.
Elon Musk, go ask the Gates Foundation, leave our tax dollars for small business development!!
You’re a fucking moron. Musk is saving tax payers hundreds of millions by producing rockets for NASA at half the cost of Lockheed.
Tesla is a small company.
The Gates foundation isn’t a small business loan company, it is a Charity dedicated to increasing vaccinations world wide, fighting illness and education.
This is going to end up like the organic food industry.
Oh, you mean like Whole Foods Market…
FAIL
Hooray rich people!
Thanks for putting your money into these new toys and proving the concept of a fully electric automobile. Now, can you buy a couple more so Tesla has the funds to R&D a model in the 10K range? It may be awhile before I muster up the funds to get into the current product line.
Even if they were just break-even Tesla’s progress is great news for anyone looking to ditch their gas guzzler. I’m hoping that all of my future cars will be electric and I’m going to need to buy again in about five years so the clock is ticking. Would be great if after the S Tesla were to do a wagon or crossover (I need room for two kids and two dogs)…
thanks for the update. i was reading somewhere yesterday some movie star is getting a new tesla. i support them because they are doing what tesla is doing and even if they are the only ones that get to be the face for the movement that is fine. it’s good to learn they are actually making back some money. there’s a couple companies here that are now going to get government funding because finally the government has realized that it is going is good investing and that it will pay off. we’ve also got, after lot and lots of citizens protesting against government and through the grassroots way, government to write new laws allowing ev’s on the road. lol. they didn’t want to do it but you can’t really deny what people want. i think they didn’t want to change the infrastructure because it would cost money to put in all these battery power stations and re-educate the public, but it’s happening ever so slowly and it’s one of many good things.
i know this isn’t the place but ehem…that logo can be waaayyyyyy better. it’s a pretty strong symbol and clean lines but could definatley be worked and speak to the cliental (current and future) of the product(s).
yeah by the way i make no sense.
i love cars
I’m profitable.
See? Anyone can do it.
Good news. Don’t know about the skeptical comments from other users but the idea of getting more electric cars into the market sounds attractive!
Ta ta Gas Guzzlers and clunkers!
lol..notice if you follow the link, their blog section heading says ’soap opera’ now hahahah
Don’t forget that the oil companies want to transport liquid and dispense at a service station. America needs electric plug in cars.
The PR says Nissan will have an all-electric vehicle sold in the Europe and US next year (Nissan LEAF) and it will be in the $25,000 range.
How is Tesla going to compete with Nissan?
By being sexier.
Seriously look at the Model S and then look at the Leaf.
I know which one I would rather drive. It’s the one that looks like a Maserati and goes twice the distance. It also goes faster than ~75 mph.
For the same reason that Ferrari and Lamborghini still exist when you can buy a perfectly good Honda Accord to actually fill the need of transportation.
I don’t think they intend to compete with only a high priced sports car. They will also have the lower priced models that the competition will introduce. Ferrari and Lamborghini still exist because they are part of/owned by much larger companies, Fiat and Audi respectively.
Were they profitable in July alone, or have they reached run-rate profitability? It’s a crucial distinction. Given that they can only recognize revenue when the customer takes delivery of the car (presumably), how many car shipments did they have in July vs. in June?
One profitable month is pretty arbitrary, depending on the shipping/acceptance schedule of the cars and how finished goods inventory/manufacturing cost is accounted for.
Considering Musk has said they will be producing 20-30 cars/month by 3Q09 (see: http://www.left...h-ceo-says.html), then the profitability number for July was an outlier, not a run-rate number.
Also, as a prior commenter has pointed out, the 109 cars only accounts for a little more than half of the $20M in revenue. Was the other $9M recurring or one-time? And what were their margins on the non-auto-sales revenue? If they made $8M in profit on $9M in one-time licensing revenue and lost $7M on $11M of car sales revenue, that’s not terribly impressive.
My point is only that the numbers presented don’t tell the whole story.
I posted this on CG… hope it’s fine here too:
“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.
Note: They said it doesn’t reflect proceeds from the government loan, but their answer should state whether items purchased with the government loan were included in the expenses through depreciation or any other form, or not. Basically, I bet they bought stuff with that money, and so on a cash and short term investment basis, they’re still burning money.
Also, there are a lot of “games” that could be played… maybe they produced so many vehicles to achieve some kind of efficiency, but in the process, are increasing inventory in anticipation of future sales. This won’t impact their earnings one bit, even if they produce 10 times as many cars as they sell…
I think we’d know if they were producing an absurd amount of cars, and so that’s probably not what happened, I’m just stating that there are lots of tricks that can be played once you venture into things outside of measuring cash…
Gimme a diesel hybrid plug in with HHO booster, park it under a solar carport and burn extra virgin olive oil as fuel until someone releases the info how to get 100% HHO production. Then I can go back to the simple ICE with a Water Fuel Cell sans toxic batteries and melted snow will be my fuel with emissions being mostly water vapour. I’ll heat the house and run the electric with such tech as well, maybe even with the vehicle itself. The tech is out there. Keep tinkering. Super Capacitors might save us as well. Nissan is working on them. http://www.brow...nsgasvideo.html
I think Elon Musk is great and I believe that all of his projects will be a success, but this is just PR.
They are private and there is to much room to play with the numbers, especially when you are only talking about one month. Although I really should read Elon’s blog before I post this.
Maybe the’ll make it, and (in the face of the big-pocketed oil industry) maybe they won’t.
At least they have proven that a cool all-electric vehicle with the performance consumers desire is possible.
We ain’t seen nuttin yet!!!
Mike, since you were trained as an attorney, please answer this: Since all emails (sent and received) are discoverable (discovery phase of any lawsuit), doesn’t using Google Voice to transcribe all of your incoming voice mail messages mean that now all of those voice mails are discoverable as well? This seems very dangerous to me. Many things are said in voicemails that aren’t intended to be permanent. It’s easy to imagine that some of those voicemails could be problematic if played back in a courtroom years later, especially out of context and with opposing counsel leering and pointing fingers.
Interesting to read all these comments. My impression is that nobdoy really seems to follow where this industry is heading. Nissan as well as Renault will be launching their all electric family size cars next year, Mercedes bought into Tesla, Warren Buffett (!) bought a significant stake in BYD, a Chinese (!) car & battery manufacturer that has launched an all electric family sized car and signed a coop agreement with VW ….and so on.
Do you think these big boys would spend all their money if they wouldn’t see the potential?
Tesla is small and has probably realized that they may actually be too late in order to seriously compete but their software and battery technology seems to attract some serious (car-) industry interest.
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....y/2centspermile
Tesla got 400 million dollars for what ? their cars sink…recalls…not price competitive….. no new technology … what a boondoggle !!!
GM and Ford will eat Tesla’s lunch…..Who’s smokin’ what with these price points……The government will not get their money back ever from these frauds !!!