Tesla Motors in the black, tweets CEO Musk(Read article summary)
Tesla Motors CEO Elon Musk tweeted Tuesday that the company was narrowly cash flow positive last week. Tesla Motors achieved profitability in 2009, but that didn't continue, and it's unlikely to continue this time--at least in the short term, Ingram writes.
Some of the biggest news of the year has been broken on social networking site, Twitter.
"Am happy to report that Tesla was narrowly cash flow positive last week. Continued improvement expected through year end", he announced.
No doubt the news is music to the ears of Tesla fans, not to mention Musk himself--but at the same time, it's important to put things in context.
While Musk expects things to improve further, this is still only one week. As such, it's a minor success, rather than a major one--and Musk no doubt knows that there's still a lot of hard work to come.
That includes keeping up enough cash flow to stay in the black. Not necessarily the easiest of tasks, particularly as some buyers are still waiting for theircars, delayed by production slippages and EPA certification.
Tesla's expenditure will increase as it ramps up production, and needs to deliver cars quickly to cover its costs. Tesla has also had to delay production this year, owing to delays in acquiring parts from suppliers. Small setbacks like this aren't uncommon, and will ultimately lead to fluctuating profitability.
We've been here before, of course. Tesla achieved profitability back in 2009 while it was building the Roadster--but that didn't continue, and it's unlikely to continue this time--at least in the short term.
It's certainly not an insurmountable challenge, but the message here is simple: positive cash flow won't necessarily stay that way.
One swallow does not make a summer...