Remember a few years ago when Tesla said it was going to teach Detroit a thing or two about building cars? Well, it appears as though Tesla is learning the hard way that cars aren't so easy to build. Nor are they particularly cheap to build, especially the electric kind.
In the midst of looking into Tesla's latest round of pricing adjustments, Green Car Advisor found out that Tesla was losing as much as $48,000 per car on some of its early roadsters. Subsequent changes have reduced that number substantially, but the latest round of pricing changes was designed to actually make Roadster profitable, a key factor in Tesla's ability to secure a government loan for development of its proposed sedan.
Makes for quite an interesting situation given the recent spotlight on the Big Three. There's no doubt they have made their share of poor decisions, but they were asking for money to keep some of the country's biggest businesses afloat in the midst an economic downturn. Tesla wants a sizable chunk of money too ($350 million), yet it hasn't shown that it has any ability to pay it back. Wonder how Congress will handle that one?
GCA: Tesla Admits Huge Losses on First Cars
steve_ says:
09:51 AM, 01/21/09
This company has always had the faint smell of being more about touting their stock instead of making cars to me. The revolving door of top management hasn't helped their rep any either.
estreka says:
03:21 PM, 01/21/09
The first spark doesn't always start a fire. I doubt Tesla will survive, but I bet there are a few that will learn from their mistakes.
billt9 says:
04:29 PM, 01/21/09
Is this a Ponzi scheme?
jkp1187 says:
05:06 PM, 01/21/09
And god forbid someone like Jeremy Clarkson make some negative comments about Tesla... Came down on him like a ton of bricks.
I'm starting to think that Tesla is all show, no go.
iancar says:
06:40 PM, 01/21/09
I doubt Tesla is half as economical or environmental friendly as Porsche 911 Carrera. Forget it people, if you want to travel green and save some green, take a ride in a bus. If you want to go fast, plenty of cars make much better sense.
legacygt says:
05:42 PM, 01/22/09
Wouldn't you say that every car manufacturer looses money on it's first cars? Look at the business plan of any start up and there tend to be years of red ink. Tesla required large up front investment and profitability cannot arrive until there's a degree of scale. Tesla does not have the luxury of having a full lineup to float the company while they develop and market a new model. Nor do they have a great economic climate in which to operate. But we should not dismiss their viability simply because of the fact that they are not profitable with the first handful of vehicles they've produced.
firstwagon says:
02:14 PM, 01/24/09
I agree most poducts are sold at a loss at first (depending how you want to adjust the books).
However if Tesla is going to want taxpayers money, they should have to prove there is a realistic chance that they will make a profit on their cars at some point.
Someday in the future is not good enough at this point. Look how much investors money they have burned though and I still don't think they have a truly viable product.