Tesla Motors in the black, tweets CEO Musk

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.

Stephen Lam/Reuters/File
The body of a Tesla Model S is transported by an automated crane at the Tesla factory in Fremont, Calif., in this October 2011 file photo. News that Tesla Motors was cash flow positive last week is music to the ears of Tesla fans, Ingram writes.

Some of the biggest news of the year has been broken on social networking site, Twitter.

For Tesla CEO Elon Musk, that includes regular tweets about the company.

On Tuesday, he tweeted that Tesla Motors [NSDQ:TSLA] was in the black.

"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 theircarsdelayed 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...

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Tesla Motors in the black, tweets CEO Musk
Read this article in
https://www.csmonitor.com/Business/In-Gear/2012/1206/Tesla-Motors-in-the-black-tweets-CEO-Musk
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe