We are excited to bring Transform 2022 back in-person July 19 and virtually July 20 - 28. Join AI and data leaders for insightful talks and exciting networking opportunities. Register today!
Electric vehicle maker Tesla Motors announced it will hit profitability by the second half of 2009. The statement was made in a recent company newsletter. Boosted by the $40 million in capital it raised from existing investors in December, the San Carlos, Calif.-based company said this prediction is based on pre-sales of its new Roadster vehicle model, which is already sold out through November of this year. On top of that, the Department of Energy has agreed to distribute funds from Tesla’s $350 million loan application over the next five months.
Still, the announcement seems incredibly optimistic considering the blows Tesla has weathered in recent months. Last November, it reported that it only had about $9 million on hand. Add that to a round of personnel cuts, a delayed production schedule (the company failed to raise the requisite $100 million for a new model) and a management shakeup, and it’s clear why industry insiders and investors became increasingly skeptical of the company’s ability to turn out feasible models. Finances ran so thin at one point that chief executive Elon Musk (a co-founder of PayPal) said he would pour his own money into guaranteeing timely production.
But Tesla is doing everything it can to break from the past, starting with its potentially lucrative agreement to build battery packs for Daimler. About 1,000 of these packs will be used in the auto maker’s new electric Smart car before being adapted for other lines. It also plans to use cash received from the DOE to build a factory to produce its new Model S line, a cost-efficient luxury vehicle slated to launch in March. Tesla executives told VentureWire that president Obama’s emphasis on green technology, particularly as it applies to transportation, should help hurry the loan along.
In the past, Tesla has raised $200 million in capital from Capricorn Management, Compass Technology Group, Draper Fisher Jurvetson, Technology Partners, VantagePoint Venture Partners, Valor Equity Partners and JP Morgan Bay Area Investment Fund.
VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative enterprise technology and transact. Learn more about membership.