Tesla Hanging Between Innovation And Rate Of Production

Tesla Model S

Can tesla motors build cars and make money as well? This is a big question for the company right now. Tesla has achieved something difficult: It has entered the auto business, credibly, with a great car, the Model S sedan.That's a hard thing, and Tesla deserves enormous credit. The Tesla Model S is increasing sales year-over-year, but that does not mean the company is reaping massive profits from its growing luxury vehicle output. According to source from insider, the company is losing $4,000 per sedan or $359 million last quarter. Because manufacturing its car has been another story. Tesla has kept its quality high, but boosts in manufacturing speed have been slow to come despite what the company says is a consistent backlog of orders and it has encountered delay after delay as it works to add the Model X SUV to its production line. The company is hoping to jump from one low-volume vehicle to several models by Q1 2016. CEO Elon Musk is also expanding a venture to manufacture electric-power-storage systems.

Companies like General motors have amassed for larger cash cushions as they have rebuilt balance sheets battered by the 2008-2009 recessions.GM, restructured six years ago in a government funded bankruptcy, has targeted cash reserves of $20 billion and had more than $28 billion in cash equivalents as of June 30.

Tesla operational strategy

Tesla has made moves to expand sales volume, and lure people to pay more for its vehicles. In addition to adding a lower priced version of the Model S, Tesla last month said it would offer performance upgrades for its Model S 85 and 85D for $5,000 and launched the Model S 90D and P90D high performance cars at a $10,000 price premium.