Tesla Motors will reach profitability next year reveals CEO Elon Musk.
As much as Detroit needs a $34 billion government bailout to keep the lights on and continue building gas-guzzling pick-ups, minivans and SUVs, Silicon Valley startup Tesla Motors does not require Federal money to survive.
The $40 million the San Carlos, Calif.-company secured last month is twice what it needs to reach profitability next year, said CEO Elon Musk this week.
However, the 300-person company is still going after a $450 million government loan to accelerate the production of its upcoming model “S” 5-passenger all-electric sedan and its power-train factory.
“The sedan program is $350 million. This is tiny compare to what Detroit is asking. It’s like a month interest,” said Musk, “Compare (it) to $34 billion. We’re like less than 1%. It’s like ridiculous. We’re asking for less than 1% what Detroit is asking for…It’s quite reasonable to me.” Musk said he would use another $100 million to build the power-train factory that will supply other car companies.
Loan? yes. As long as you present a strong, clear, research-based program on how you are going to pay it back, then by all means, you should get this loan.
And as long as there is oversight to make sure you are executing on this plan, then by all means, yes.
I would like to stress that this is a loan, not a handout.
If the market is there to allow you to pay back this loan with interest, then it is a win-win-win for everyone (Tesla, Government, Consumers).
[...] Does *NOT* Need Government Funding To Survive, CEO Declares Saw this on Tesla’s home page: Detroit: Tesla Motors Does *Not* Need Government Funding To Survive, CEO Declares TechPulse 360 Seems interesting that the $40 million is enough, to get the company to profitability. [...]
Lessee – Tesla has made, what, less than 200 cars in their lifetime? What is that in percentages to the Big Three? I’m a big fan of Tesla, yes, and I despise the auto industry as it stands today, but if they’re going to compare themselves to Detroit for whether they should get a loan they should look at the entire picture…
This made me worry greatly about Elon’s financial acumen. 350,000,000/34,000,000,000 x 100% = 1.03%. That’s MORE than 1%, Elon.
It hasn’t been lack of technology that has kept the world in the dark. Political courage and will, or the lack of them, have been the brakes that hold us back. The “idea whose time has come” owes it’s existance to people like Elon, because without such people, the idea never lives. It takes an extrordinary personality to manuver through the barriers of life as it is to life as it could be. Perhaps the new administration will find a kindred spirit in Mr. Musk.
I rather give my tax dollars to Tesla. Why? because I know that the money will go to funding a company that actually has a future! Tesla has the technology to get us into the future. The big three has had their chance, It’s naive for companies that mature to think that things will remain the same forever. America needs new minds, new and fresh ideas. Giving away our tax dollars to the big three is plain stupid.
Why not secure a Gov. contract where they give Tesla X amount of dollars in funding and Tesla give them Y number of Sedans for the aging expensive gov fleet of cars once they are in production.
there has to be some equation involving X and Y that = Win Win.
[...] TechPulse 360 TechPulse 360, December 12, 2008 Read the story at techpulse360.com [...]
I’m all for Tesla getting the loan as long as they pay it back with interest in the same way that the Detroit Three are required to do, and I’m very impressed with all that Tesla has accomplished and will hopefully continue to accomplish. However, I’m not too crazy about some of the slights to the Detroit Three that I’ve read here. The Detroit Three sell millions of affordable cars (key word: affordable) and employ hundreds of thousands of people to design, engineer and manufacture cars that are affordable and practical to all people, not just the rich ones, while paying millions of dollars in taxes to cities, states, and the U.S. government.
Personally, I think my 2 year old PT Cruiser that I paid $9,000 for and gets 26-27 mpg in normal driving in all kinds of conditions and can take me all the way across the country, driving 500-700 miles before I have to stop and rest, and hauls 4 people and luggage easily, or alternatively about 40 bags of mulch for the lawn, is a far better deal than a $110,000 car that goes 200 miles between charges, which take several hours to accomplish, and only carries 2 people with hardly any luggage space.
I’m very impressed with Tesla and wish them much success, especially in reducing the cost of their cars, but I’m very curious as to how many of you Detroit bashers out there have actually placed your down payment on a new Tesla. If you haven’t, then I suggest you do so soon, because if Detroit doesn’t get the bridge loans from the government very soon, you can kiss those affordable cars like my PT Cruiser goodbye.
In response to Steve Logan; and how do you think the nations blacksmiths felt when the first Model A’s rolled off the line? All those designers and engineers trying to figure out where to stuff more hoses, wires, belts, cams, cranks, lifters, seals and all the peripheral junk that is an industry in itself to supply all of those parts that fail in such consistent manner that supports a successful after market industry? You’re right, Steve.
But think of this. The Tesla is like the Model A precursor. It is the beginning of a better idea. Affordable cars from Detroit? I stopped buying those “affordable” junks and bought a used Honda Accord that has served me better than all of the American cars I have ever owned put together and I have owned many in my lifetime; and the Accord was made right here in the USA…how odd?
You seem to be overlooking the very critical element that would actually save the Detroit automakers….sales. You can throw tax payers money at the Big Three all day long, if they don’t sell something that’s worth buying to people who can afford and/or qualify for a loan to buy a new car then they might just as well jump head first into the abyss and save us all a lot of money because, Steve, until all of those companies that have laid off millions of good American workers to take advantage of Red Communist Chinese child slave labor returns and rehires – OR – some of us enterprising businessmen decide to revitalize the mighty American domestic manufacturing machine, about the only thing we’ll be able to qualify for a loan for is a bicycle.
Tesla is not asking for bailout money, they’re asking for money that was put aside before the crisis for advanced technologies. They’re asking to be allowed to apply for the money that was put aside for exactyl that purpose, and not have it swallowed up in the mega-billion bailout fund. If we allow the curent financial crisis to derail all plans to look forward toward better, clean technology–that already exists, mind you–we will not survive on this planet.
Amusing
Tesla motors which doesn’t produce more than 100 cars a year is comparing itself to Detroit, an industry that will make more cars in the next hour than this company will achieve in the next year.
Yet they still are going after 350 million
Not to say it’s bad, but apples to apples please.
Journalistic integrity to the wind
Goog financial advice I fully agree.
Love your blog and I’ve added it to my bookmarks.
good stuff, now I’m off to read your other posts.