This month, Tesla motors (a high-profile U.S. electric vehicle (EV) manufacturer) accomplished the incredibly difficult (for any auto maker nowadays): it made a profit! A $1 million profit, to be exact – a quick turnaround from Tesla’s near-collapse of last year. On top of being a sign of vitality for the auto industry, this profit is considered, by BusinessGreen.com anyway, to be a huge achievement for the sustainability movement: it could signal the commercial viability of the EV sector. While I agree Tesla’s profit is grounds for a big “woo hoo,” I wonder if such conclusions on its implications for the greater EV sector are a bit jumped-to. If I treated two leukemia-positive cats with the same medicine (one cat being prone to the disease and the other not), and the not-prone cat recovered, could I reasonably assume my medicine could conquer feline leukemia in both types?
Tesla reportedly curbed its own demise by securing fresh funding, partnering with another auto firm, and continuing the creation of new Tesla EVs. One of its models, a sports car called the “Roadster” (which can travel 244 miles between charges and is faster than a Porshce) earned $20 million in the sale of 109 vehicles last month – the company’s first profit since its foundation in 2003. It appears Tesla took a multi-medicinal approach – which is why a quote by Tesla Chief Executive Elon Musk (reported, in parts, on both Wired.com and BusinessGreen) caught my attention:
“We achieved bottom-line profitability [with] hard work…, [improved] quality, [and lower costs] on the Roadster…. There is a strong demand for a car that is unique in offering high performance with a clean conscience…. Moreover, customers know that in buying the Roadster they are helping fund development of our mass market of electric cars.”
While no one really knows Musk’s complete internal dialogue on the matter, the quote underscores a leap in logic. While it mentions Tesla’s multifaceted efforts to salvage itself, the quote overemphasizes the role of consumer faith (in the virtue of EV technology) in Tesla’s Roadster-based recovery. How, then, can EV proponents claim Tesla’s Roadster-derived profits speak for the entire EV industry, when that industry has been treated with multiple medicines, with slow-moving success? Looks like the cat that recovered was treated with multiple meds, yet only one med got significant cred. How does this compute?
Wired.com offers another opinion on the matter: don’t expect Tesla’s profit to become a trend. According to Wired, most of the money rolled in after Tesla delivered cars on which customers had already placed deposits. Wired also scrutinizes Tesla’s reported “surge” in Roadster orders, the likelihood of such a surge continuing, and Tesla’s ability to fund both manufacturing and marketing of upcoming models. In other words, the $1 million profit may be a one-hit wonder.
What do you think?