Tag archives for debt
Anyone close to the industry would probably agree that Tesla, of all the small EV makers, is making the biggest strides toward leaving its start-up status behind.
Agree or disagree, it sounds like that might finally be the case. Company CEO Elon Musk released a statement today through Twitter suggesting the company is in the black.
“Am happy to report that Tesla was narrowly cash flow positive last week. Continued improvement expected through year end,” Musk said.
With orders stacked for months worth of production, and a publicized price increase that helped to clinch last-minute buyers, Tesla seems to have the formula for success figured out. In fact, Musk predicted in early October that the company would reach this target.
SEE ALSO: Tesla Model S Gets $2,500 Price Increase
It probably wasn’t very hard, though. The brand doesn’t build cars before they’re sold. Instead, it takes orders and deals with scheduling a backlog of scheduled builds. That would give a guaranteed income figure the brand can leverage.
It’s also important to remember that while Tesla might be in the black now, there isn’t any promise it will stay there. The company operates on a one-car model, building a run of vehicles before moving on to something else.
There is a buyback program for people who purchased the Roadster, but production is concluded which means buying a used one.
Provided the brand sticks to its formula for the Model X, it wouldn’t be terribly surprising to see a similar dip into debt while the brand’s crossover bites chunks out of the company’s coffers. Ideally, the Model S will sell with enough success to fund the next car without that becoming an issue, but there are many factors at play.