Tesla profitable by upcoming month, CEO affirms

Posted on Wednesday, 24 June 2009 , 12:06:46 byEmil

Filed under teslaceoprofitpricecostdownlowTesla

Tesla profitable by upcoming month, CEO affirms

It was believed that Tesla Motors was on the bankruptcy verge only a few months back but Elon Musk - company CEO says he's expecting by next month the EV manufacturer to be profitable. Musk addressed the profitability of Tesla in a blog online refuting the lawsuit by Martin Eberhard - ex Tesla CEO.

The initial estimate for the Roadster was $65,000. Musk with the board members of Tesla, realized quick in 2007 the cost of a Roadster unit was almost 140,000 Dollars. This posed an important problem for the firm as they sold each Roadster car for under 100,000 Dollars.

Musk started an aggressive price cutting plan as soon as this error was discovered, making the firm up for eventual gaining. The Roadster's by Tesla price is down to only 80,000 Dollars, that will get the firm into the black on the upcoming month. 'Combined with a steady production volume of 20 to 30 per week in the third quarter this year and a good take up rate of the higher priced Roadster Sport, we expect to cross over into profitability next month' Musk stated on the blog.

Musk attributed the cost savings action to moving the production of battery from Asia to California. Although Asia is very well known for the low-price manufacturing, costs of shipping associated with hard battery wraps essentially negated the price savings. 'Avoiding the cost of shipping a half ton pack from Asia also meant significant savings on shipping costs. This is a much bigger deal for a heavy and bulky product than a small consumer electronics device, where outsourcing to Asia makes a lot more sense' said Musk.