Beyond Green

Electric car start-up Tesla Motors, set to begin delivery of its $128,500 roadster next month, expects to turn a profit, according to a blog post by CEO Elon Musk. The news was reported by the Times Green Inc. blog.

Although the post dealt with a current law suit by a co-founder, Musk also revealed some details about the company’s performance. “An incredible effort by the development, supply chain and manufacturing teams has brought the Roadster material cost down from $140k to approximately $80k as of this 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,” he wrote.

Although it is entering the high-end luxury sports car category, that’s just the first thrust. Musk wrote:

Tesla is sometimes criticized for the fact that our first car is relatively expensive, implying we thought there was a shortage of sports cars for rich people! Obviously, the transition to electric cars can only occur if they are affordable. However, a low volume and fairly costly product like the Roadster is the only realistic initial option for a small startup trying to create breakthrough technology. New technology in any field takes a few versions to optimize before reaching the mass market and in this case it is competing with 150 years and trillions of dollars spent on gasoline cars.

Meanwhile, Toyota recently announced it had booked 180,000 sales for its new Prius – in the midst of the recession. It was Japan’s bestselling car last month, spurred by government incentives. Buyers now face a 7-month wait for the car. Toyota also cut manufacturing costs for the Prius by 30% — short of its 50% goal — but still showing that electric cars are being built faster, better, cheaper.

•  June 23rd, 2009
• By Samuel Fromartz
• Comments(1)