The coming of age of Tesla

For the first time, Tesla Motors has turned a profit. On that note, Musk has clarified that the company’s Model 3 will not need fresh capital infusion and that its deliveries are as per schedule. Tesla has also significantly reduced costs for this mass market model. The Model S though is what is going to get its cash registers ringing.

Buoyed by around $139 million in sales from clean car credits, Tesla Motors Inc. has reported its first quarterly net profit in more than three years. Elon Musk, Tesla’s CEO, said the company could turn a profit again in the fourth quarter.

Significantly, Tesla has disclosed that it has managed to substantially reduce production costs for its high volume Model 3 sedan, which is scheduled for launch next year.

Musk told analysts the company’s current plans “does not require any capital raise for the Model 3 at all.” However, he went on to add, that Tesla could still raise some capital to “account for uncertainty … and de-risk the business”.

The fact that Tesla Motors has managed to turn a profit, even for a single quarter, has helped counter sceptics who have openly questioned Musks ambitious plans to combine the operations of SolarCity and Tesla into a single company which offers roof-to-garage no-carbon energy systems.

Tesla Motors has reiterated the fact that its mass-market Model 3 sedan is on track for deliveries for the second half of 2017. The Model 3 costs almost half of the Model S and is priced at $35,000.

The 100KW version of the Model S has a starting price tag of $134,500. It can travel 315 miles (507 km) on a single charge. It will be key to Tesla’s profitability.

Categories: Creativity, Entrepreneurship, HR & Organization, Strategy, Sustainability


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