Tesla achieves profitability in July, but for how long

Seven years into its existence Tesla Motors has achieved a milestone few Silicon Valley startups ever manage: the company was profitable in July 2009. According to a press release from the company today, its July revenues, approximately $20 million, exceeded its expenses by about $1 million. Since Tesla is still a privately held company, it has no obligation to disclose its finances nor to give details on its sales. Thus, Tesla has been very selective about what information it publishes. With that in mind let's take a little look beyond the surface.

In July, the company had its best month yet for Roadster deliveries with 109 cars being placed in customer hands. That in itself is a major achievement for a start-up automaker and is deserving of praise. If we assume an average transaction price of $130,000 with options that comes to $14.2 million in revenue. I'm not a financial expert, but I'm told that the deposits for Model S can't be booked as revenue. That leaves about $6 million in revenue which likely came almost entirely from Daimler for battery packs and charging systems for the Smart ED. That won't be ongoing revenue and in all likelihood is at least break even if not profitable.

While Roadsters reportedly had a surge in sales in July, Tesla still isn't say what the net sales are after subtracting cancellations. If net sales of the Roadster don't pick up soon, the profits could be short lived. Let's hope not.