Tesla Reaches Profitability

Well, well, well what do you know? Tesla Motors has been on a long slog to profitability over the past few years. Problems with parts led to delays on the Roadster, there was mismanagement and the company ended up with a car that costed far more to produce than ever predicted.

That's when one of Tesla's co-founders, Elon Musk, took over the reins and decided to make a lot of changes. Drastic cost reductions, increased prices, layoffs, reduced spending on the Model S program all were part of an effort get Tesla back on track. Having taken those steps, it was estimated that Tesla would hit profitability in July.

Tesla's many critics said that was impossible, especially with the state of the economy. Against all odds though, it looks like they hit it - and eerily on target too. Tesla announced that it made a profit in July of $1 million on revenues of $20 million, with 108 Roadster models sold.

A veriety of factors helped contribute to Tesla hitting this milestone. Sales were up due to increased consumer confidence (think Daimler investment and a government loan helps?) and easier purchasing access (Bank of America financing). Also,  profit margins on each sale went up as well - Tesla says it has reduced cost per vehicle to $80,000 versus a selling price of $108,000

It also looks like this trend is set to continue in the months ahead as well - Tesla is having high-profile openings of company stores that will boost sales and forays into international markets will increase demand for the Roadster and Model S further. What a turnaround from November 2008 when the company was supposedly running out of cash and deep in the red on each car sold! Way to go Tesla!