Tesla Slashes Roadster's Production Costs

Tesla Motors is willing to reduce the total production costs for its popular Roadster electric car from $140,000 in the summer of 2007 to no more than $80,000, CEO Elon Musk said in a post on the company's official blog. In other words, the company expects to increase its revenues and return to profitability as soon as next month if everything goes according to the plan.

"The real reason that Roadster development cost so much more than can be accounted for by typical entrepreneurial hubris is that we essentially had to spend the development money twice. After Eberhard was asked to step down from the CEO role two years ago, almost every major system on the car, including the body, HVAC, motor, power electronics, transmission and battery pack, had to be redesigned, retooled or switched to a new supplier," Musk said in the blog post.

"With the release of the Roadster 2 this month, we are finally at the point where Tesla has a solid supply chain and a unit cost that allows us to operate the Roadster business line profitably."

Tesla's Roadster is a two-seat electric sports car capable of traveling up to 200 miles per charge. Thanks to its electric powerplant, the car can hit sixty in around 4 seconds, according to official figures provided by the manufacturer.

"Combined with a steady production volume of 20 to 30 per week in the third quarter this year and a good take up rate of the higher priced Roadster Sport, we expect to cross over into profitability next month,"
the CEO wrote. "This may sound counterintuitive, but our unit cost actually went down and quality improved as we went to a more automated system and could iterate quickly with engineering to find design efficiencies."
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About the author: Bogdan Popa
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Bogdan keeps an eye on how technology is taking over the car world. His long-term goals are buying an 18-wheeler because he needs more space for his kid’s toys, and convincing Google and Apple that Android Auto and CarPlay deserve at least as much attention as their phones.
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