Tesla Motors

Tesla Motor Company started in 2003 with the idea of selling some high end electric cars. The plan was to get wealthy people, mostly from Silicon Valley to buy cars at over $100,000 each and then build a less expensive model for the average guy. As they got underway they caught the eye of politicians who believed in global warming and wanted to do something about it. This led in 2009 to a 465 million dollar loan from the US Dept of Energy. They started producing a model that cost $35,000 but the federal government would offer $7,500 tax credit and some states offered as much so the consumer could purchase this car for $20,000. The company was losing money and needed a boost which they got from a California program called, “ZEV” or zero emissions vehicle. This was to encourage the development of electric cars and companies that did not receive a set percent of their income from such cars had to purchase these ZEV credits from companies who had an excess. Since Tesla produced only electric they had excess credits. Typically a company like Ford Motors had to pay Tesla $35,000 for each car that Tesla sold. In the first quarter of 2013 Tesla announced its first profit. This was done by turning a 57 million dollar loss into an 11 million dollar profit by receiving 68 million dollars in ZEV credits from their competitors. In 2010 Tesla went public and their stock has gone from $10 to $235 and the company has a market value of $30 billion. They have sold a total of 70,000 cars meaning that each car added $450,000 to the company’s worth. Is this a great country, or what!