Milestone: Tesla Was Cash-Flow Positive Last Week

Tesla Chief Executive Officer Elon Musk has to be feeling pretty good about now. Arch rival Fisker Automotive has seen negative headlines all year, and is now searching for a partner as it moves forward with development of the Atlantic.

Meanwhile, Tesla as been busy collecting accolades from the press. The Model S has won Car of the Year at Motor Trend, Automobile Magazine and Yahoo Autos. Time gave the S 2012 Best Invention of the Year, Popular Science its Best of What’s New award and Popular Mechanics its award for Auto Excellence.

Recently, the company announced a $2500 price increase for the Model S. This bump will go into effect for new buyers of the car. The Model S is a hot commodity, so squeezing some extra profit margins out of each sale makes sense. It’s not like $2500 will matter much to buyers in this segment anyway. One thing that Tesla has relentlessly focused on throughout this process is quality. Tesla has gone about the Model S production process in a way that insures each product the company is putting out is top-notch.

Musk made a calculation that he would take the long view rather than damaging the Tesla brand by pushing out many units with a shoddy build quality. This approach has paid off, resulting in no damaging headlines and many satisfied owners. Production is beginning to ramp up very nicely right now. So much so in fact that Musk announced to his Twitter followers that Tesla was cash-positive last week. This is a huge development for the company and puts it on track to meet its profitability targets for 2013. Up until now, not enough vehicles were being produced to offset the large operating costs and continuing investment into a full-scale production ramp-up. Profitability with the Model S is absolutely essential and Musk has always insured investors that the company would see a hefty margin. This is an important frst step in achieving that. With over 16,000 Model S orders in the books, we are looking forward to seeing what 2013 has in store for Tesla.

About The Author

Tony Pimpo is a young automotive journalist who lives in Northern California. He believes the future of the automotive industry will depend in a large part on the recommendation of enthusiasts and Generation Y. More than ever, automakers lately have realized the power of Gen Y. Not only in regards to buying power, but in driving opinion and spreading a brand’s message through the internet and various forms of social media. His appreciation for cars formed at an early age, thanks to his dad, who has always been involved with cars in different ways over the years. Tony has contributed to various websites in his pursuits, and is on staff at GMInsideNews, where he has been writing since the age of 12.

1 Comment on "Milestone: Tesla Was Cash-Flow Positive Last Week"

  1. Troy

    i think Tesla is a game changer. i Really hope they succeed. I would love to work at the company one day. its amazing they already have almost a years worth of reservations! (based on there 20,000 units a year production goal)

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