Tesla, the electric car startup, has sold out of its entire 6500-unit model run for the first year of its Tesla Model S sedan and looks to reach profitability by the end of 2013. Or so company founder and CEO Elon Musk says.
Word comes by way of an interview Musk had with Bloomberg News in which the entrepreneur spoke about his company’s production sedan and the state of Tesla’s business. Recently, Tesla has come under scrutiny for receiving more than $400 million in federal loans for green technology. Solar-cell company Solyndra went bankrupt on Sept. 1 after receiving a similar loan, prompting legislative scrutiny from government officials.
Tesla, which led off its foray into production manufacturing with its Tesla Roadster electric sports car, is gearing up to put its Model S sports sedan on the market. With a starting price of $57,400 before federal tax incentives, the car will cost half as much as the Roadster. But despite the plan, Tesla has lost almost $108 million through 2011 and another $68 million in 2010 since going public. It has yet to turn a profit since its 2008 inception.
In accounting for its cars to be made in 2012 and 2013, Tesla credits its reservation deposits as sales—$5000 per car or $40,000 for the Signature Series Model S that comes with a longer range battery pack—on its balance sheets. No Model S cars have found consumers’ driveways yet.
Musk says that most orders have come from new customers to Tesla.
“They’re mostly new buyers,” Musk said in an interview with Bloomberg Television. “Only about 600 people who have ordered Roadsters have also bought the Model S.” Tesla sold around 1800 Roadsters in its four-year production run and expects to sell 20,000 Model S sedans per year at full capacity.
If all goes to plan, though, Tesla is expected to deliver its first cars by mid-2012 and break into profitability by the end of 2013. With healthy investments from Toyota and Mercedes-Benz parent company Daimler, we would certainly hope so.
Source: Bloomberg, Tesla
By Jacob Brown