Tesla is on its way to becoming profitable, CEO Elon Musk says

Article by Christian A., on December 8, 2012

It appears that electric automaker Tesla Motors will finally be on its way to becoming profitable. In a message that company CEO Elon Musk posted on Twitter last Monday, it stated that last week, Tesla was “narrowly cash flow positive.” Musk said that the improvement is likely to continue until yearend. Tesla has struggled to make a profit even after it got private funding that amounts to millions of dollars.

It was even granted a $465 million loan by the Department of Energy. Tesla posted a $111 million net loss for the third quarter of 2012. But then, Tesla expects a positive operating margin of around 12% by the end of this year. Tesla posted sales of 2,400 units of the Lotus Elise-based Roadster, the company’s very first car.

The Tesla Model S was named the 2013 Automobile Of The Year while Motor Trend named it Car Of The Year. But then, sales have not been brisk at all. So far, Tesla has gotten over 13,200 reservations for the Model S but as of November 5, it had only assembled 350 cars and delivered only 250 to paying customers.

This didn’t prevent Tesla from increasing the Model S prices by $2500, effective January 1, even if Tesla rationalized that the price bump is equal to only half the national inflation rate. With Tesla being on the right track to profitability, the company is expected to hit its targets for the fourth quarter.

Tesla aims to open 10 additional retail outlets before the year ends to reach a total of 24 domestic and 34 global outlets. Tesla also hopes to deliver 2500-3000 vehicles more before the end of 2012. For 2013, Tesla aims to continue to increase production and fulfil the delivery of 20,000 units.

Topics: tesla, elon musk

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