Tesla Might Be Losing Money, But Not Traction

Last updated on March 21st, 2018

Despite being the hottest item on the car market, electric cars still occupy only a niche in car sales in the United States. Tesla Motors, the poster child of a new-generation electric car manufacturer based in California. Counts sales of its cars in thousands rather than millions that General Motors or Toyota rely on annually with their gasoline-powered cars. Tesla’s CEO Elon Musk cites enormous costs and hurdles that go into the design, assembly and testing of an electric car, not to mention the urgent need to invest in a viable charging station network. Despite the difficulties, Tesla Motors presses on.

The first car model developed and sold by Tesla was its Roadster all-electric sports car that ran on lithium-ion battery cells and  had been selling out consistently until the end of its production in 2012. A limited batch of right-wheel Roadsters was produced in 2012 to be sold in the UK, Japan, and Australia. The Roadster had a top speed of 125 miles per hour and could travel 245 miles on average, with 313 miles being its record. The Roadster was expensive and aimed at early adopters – wealthy adventurous people who didn’t mind a yet lacking network of power stations and a hefty price tag attached to the sleek and colorful body. Yet it signaled a brighter future for the worldwide car market tired of the oil price fluctuations and hungry for change.

Tesla’s next model, the sedan Model S, is the one currently being produced and sold in North America, Europe, Asia, and Australia. There are two batteries available for Model S – 60 kW and 85 kW, with the traveling range of 208 miles and 265 miles, respectively. Model S can go up to 130 miles per hour in speed. Naturally, most of Tesla’s shares of Model S sales come from the United States, where it sold 2650 units in 2012, the year Model S entered the market. In 2014, 21 821 Model S cars were sold in the first three quarters of the year alone, while the cumulative global sales surpassed 45 000 the same year. Tesla Model S had a glowing debut in Norway, where in 2013 it became the first ever electric car to top the new vehicle sales chart in any country. On the other hand, the hugely lucrative Chinese market remains a challenge for Tesla: two of company executives overlooking the operation in China was fired this January after Tesla sold only 120 cars there in the preceding month.

Tesla closed 2014 with financial losses, but its revenue has been on the rise, and it hardly sees all the red ink as a sign of a failing business. Elon Musk is adamant about pushing sales and tech development as far as they can go. Tesla remains a dream car for the younger generation who, as of yet, cannot afford Model S, which Tesla intends to rectify – the Model 3. A 200-mile range car with a starting price of $35 000, could be within reach of an average customer by 2017.

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