Though many startup companies in the electric vehicle (EV) industry have either struggled to survive produce a profit, or insure investors of their products’ worth (or all three), one company has consistently bucked the trend of disappointing news: Tesla Motors. In 2008, the company first began selling its first-generation all electric Tesla Roadster and since then has placed more than 2,000 of the high end EVs worldwide. The Roadster is largely credited for restarting the EV revolution, and since its debut, no other manufacturer has been able to replicate a model with similar electric range and style.
The company struggled to make its first deliveries, but has largely overcome its early production troubles. By all accounts, it is not just surviving; it’s thriving. Recent news items include preorders of next year’s Model X all-electric crossover, netting the company more than $40 million overnight. In other company news, Tesla will begin repaying $465 million to the U.S. Department of Energy (DOE) in December and has decided to begin deliveries of its more than 10,000 reserved Model S sedans one month earlier than previously forecasted.
Amid this good news, don’t forget that Tesla has never made a profit and by some current estimates, its 2Q 2012 will be its most unprofitable quarter since it went public in 2010. However, starting a car company from scratch requires an enormous investment, and Tesla is not anticipated to earn a profit until 2Q 2013.
Having an estimated date for profitability is more than quite a few upstart EV makers and their upstart suppliers can boast. No doubt, the promise of profitability is making Tesla attractive to investors. Bursting Tesla’s balloon a bit, John Petersen, in a guest post on Greentech Media, describes the company’s growing popularity in the last 2 years as part of a “hype cycle,” in which interest in a company grows before an event and recedes afterwards. For Tesla, the Model S may be that event.
Or, it may not be for two important reasons: 1) Tesla is the darling first child of the EV revolution and 2) the company continues to push the EV envelope. People like the underdog, and despite being the first child, Tesla has kept the underdog image as the big auto makers, GM, Nissan, and Toyota, have crept into the company’s EV space. The Model S may also be considered the company’s equivalent of Apple’s iPhone 4s, and the Model X (due out in 2013) would be the iPhone 5; meaning the hype is not going away with the Model S.
Tesla’s Model S deliveries began on June 22. As is customary with Tesla, a great deal of publicity has surrounded the event and the company has even put a ticker on its website, counting down the seconds to the moment that CEO Elon Musk will hand deliver the keys to the first owners. The magnitude of this fanfare and its fan following is not uncommon among new PEVs, but it isn’t the end of the Tesla hype machine. Let’s hope the Model S delivers on all its grand expectations, but let’s also be mindful that this is only one of potentially many new models to be delivered by the darling first child.
Article by Scott Shepard, appearing courtesy the Matter Network.