Tesla Motors, the electric-car manufacturer launched by billionaire entrepreneur Elon Musk, may finally be on the way to turning a profit. In a message posted to Twitter on Monday, company CEO Musk said that, “Tesla was narrowly cash flow positive last week. Continued improvement expected through year end.”
If true, the message is good news for Tesla, which has heretofore struggled to turn a profit despite receiving millions of dollars in private funding, as well as a $465 million loan from the Department of Energy. For the third quarter of 2012, Tesla reported a net loss of $111 million. However, the company predicts a positive operating margin of about 12 percent by the end of 2012.
Tesla sold 2400 copies of its first car, the Lotus Elise-based Roadster, and is now ramping up production of the Model S luxury sedan. We named the Tesla Model S our 2013 Automobile Of The Year, and our colleagues at Motor Trend concurred by naming named it Car Of The Year.
Sales of the car, however, have been anything but brisk. More than 13,200 people have placed reservations for the Model S so far, but as of November 5 the company had only built 350 cars and delivered just 250 to paying customers. That didn’t stop the automaker from raising prices of the Model S by $2500, effective January 1, although Tesla defended the price bump as equaling only half the national inflation rate.
If Tesla really is on track to profitability, that bodes well for the company achieving its fourth-quarter goals. Before the end of 2012, Tesla hopes to open ten more retail outlets (for a total of 24 domestically and 34 globally) and deliver another 2500-3000 vehicles. Then in 2013, Tesla says it will continue to ramp up production and deliver 20,000 cars. We’ll see whether Tesla’s financials can stay in the black long enough for the company to hit those benchmarks.
Sources: Twitter, Tesla