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With Record Sales, Tesla Turns A Profit As Consumer Reports Says It ‘Comes Close’ To Being ‘The Best Car Ever’

By Adam Peck and Ryan Koronowski  

"With Record Sales, Tesla Turns A Profit As Consumer Reports Says It ‘Comes Close’ To Being ‘The Best Car Ever’"

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Credit: AutomobileMag.com

Tesla Motors Company is coming off a very good week. On Wednesday, the company reported that it had sold more electric vehicles than any other automaker during the first quarter of the year, and turned a profit for the first time in its 10 year history.

On Thursday, Consumer Reports — the famously austere purveyors of customer satisfaction surveys and product testing for all manner of consumer goods — announced that Tesla’s Model S roadster outperformed every other commercially-available vehicle in their annual battery of stress tests, scoring a 99 out of a possible 100:

The Tesla Model S outscores every other car in our test Ratings. It does so even though it’s an electric car. In fact, it does so because it is electric.

Built from the ground up as an EV, this car’s overall balance benefits from mounting the battery under the floor and in the lowest part of the body. That gives the car a rock-bottom center of gravity that enables excellent handling, a comfortable ride, and lots of room inside.

The reviewers didn’t stop there. So thorough was the performance of Tesla’s flagship car, the magazine went on to describe the Model S as one of the best cars they’ve ever tested in its nearly 80 year history: “So is the Tesla Model S the best car ever? We wrestled with that question long and hard. It comes close.

Tesla’s score of 99 is the highest for any hybrid or electric vehicle, and tied for the highest rating awarded to any car in the history of the magazine. The market for 100 percent electric cars has lagged behind the rest of the industry, hindered in part from the perception that the cars weren’t reliable or practical for everyday use. But coupled with the quickening expansion of high-speed charging stations in the most highly trafficked parts of the country, the endorsement from Consumer Reports could further expedite Tesla’s growth.

Lest critics think that fancy sports cars always sell well, it turns out that Tesla outsold the similarly-priced cars that drink gasoline created by Mercedes-Benz, BMW, and Audi.

Sales of the company’s luxury sedans have steadily grown in recent months and the company is now on track to sell an estimated 21,000 cars by year’s end. Tesla believes that one way the company will sell more cars is to be able to sell them directly — not through a dealership. It is asking states that currently bar manufacturers from doing this to change their laws so that Tesla could sell cars to, say, Texans in Texas. A recent bill passed by a North Carolina Senate committee would ban the direct sale of automobiles, which would be a huge step backward for the company, which has sold 80 cars in the state.

Tesla’s recent growth and profit are nice, but the company needs to grow a lot more if it plans to displace more of the gas-guzzling vehicles currently on the road. Two things will help:

  • More models: Tesla plans to release the “Model X” in 2014, which is a combination of an SUV and a minivan. A truck concept has intrigued CEO Elon Musk: “I have this idea for a really advanced electric truck that has the performance of a sports car but actually more towing power and more carrying capacity than a gasoline or diesel truck of comparable size.” The more models (which will require more factories) the better. Not everyone wants or can afford to buy what amounts to a very well-constructed sports car.
  • Lower costs: Tesla makes a good argument that the true cost of ownership is much lower than the sticker price because the car does not require gasoline, buyers get federal and state tax credits and a strong resale value. However, the price tag is still only realistic for wealthy people. As the company scales up and charging stations become more widespread, costs will start to come down. One can hope that more varied models will provide those who want to buy an electric vehicle with more economical options.

The company’s recent successes have also highlighted the success of the Obama administration’s Energy Department, which granted Tesla a $465 million to fund research and development of energy-efficient cars. Tesla has already announced that they are on schedule to repay those loans in full by 2017, five years earlier than originally planned.

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15 Responses to With Record Sales, Tesla Turns A Profit As Consumer Reports Says It ‘Comes Close’ To Being ‘The Best Car Ever’

  1. prokaryotes says:

    Electric car owners are the real Heroes! They literally drive the new economy.

  2. Jim B says:

    This is good. This car has a cool factor and this great rating says yes electric cars are ready for prime time.

    I’m hopeful this will make many more sit up and take notice. This makes it a harder to be dismissive of electric vehicles.

  3. SecularAnimist says:

    I’m guessing that Tesla already knows how to build mass-market compact commuter vehicles with better than 100-miles-per-charge range that they could sell for under $10,000 at a modest profit.

    But they don’t want to build those, for the same reason that the big car companies never wanted to build compact fuel-efficient gasoline-fueled vehicles, preferring to sell huge, gas-guzzling, high-end, expensive SUVs and luxury cars which have a much bigger profit margin.

    • Paul Klinkman says:

      Somebody will. The market will get cutthroat eventually, after the other car companies have gotten themselves bashed with that proverbial two by four for a few years running. Mercedes-Benz, BMW and Audi should be running for the aspirin today. Nobody wants their relatively slow, smelly old cars. Maybe they’ll start to get it next year.

      I already have a good idea how to build an above-grade automated transit system that takes personal cars. It just crushes most forms of urban transit. As long as nobody puts one up above the road and tries it, nobody is going to care.

    • Sasparilla says:

      I think the batteries are too expensive for that Secular – at this point its the largest cost for an EV. If you want the 100 mile range vehicle – Nissan has that with the Leaf at $30k, 72 mileage range and a whole lot of compromises.

      Plug-in batteries are dropping in price at about 3-4% per year, that drop expected to continue throughout this decade and beyond (range is going up as well and durability) and that is without major breakthroughs (which will come with all the private money for research in this industry now). By the end of the decade the battery cost will be down significantly.

      Telsa went for where they could compete (no compromise vehicle) and win while carrying that battery cost (higher end vehicles). Tesla will be there at lower price points as the battery costs come down (they’ve already talked about it) and they can bring no compromise driving to lower price points – the oil companies absolutely hate Tesla (would kill it given any chance) as Tesla wants nothing less than all EV driving for everyone (just take some time to get there). Just my $0.02

  4. Bonnie Crawford says:

    I’ve wanted an electric car for years! It would feel so good to constantly bypass the gas stations, to thumb my nose at them!

  5. Jeanie says:

    This is great news! If you can’t afford a Tesla, I sure love my Honda Insight! They are cheaper than the Prius and amazing gas mileage.

  6. Pop says:

    They produced affordable electric cars in Montreal but they are illegal to sell here in Canada. How messed up is that?

  7. Merrelyn Emery says:

    I’ll take half a dozen, ME

  8. Rabid Doomsayer says:

    The market penetration by electric cars is actually quite spectacular for their stage of development. As the sales move down from the luxury classes we will see costs fall, as cheaper solutions are found to expensive little problems.

    Even the little Leaf is doing rather well, but is still very expensive compared to the equivalent petrol car. The Tesla is priced within it’s market bracket.

    I may be wrong, but I suspect the bottom down from the Tesla will end up being more significant than the bottom up from the Leaf. Times change and it could well be a new player that shakes the world.

    Those manufactures that ignore pure electric will end up in the dust. Those that delay even a year or two, will be forever playing catch up.

    • hoedad says:

      My “little Leaf” is a real deal.
      200 a month no money down. Lease.
      Does 60 miles a day commute climbing up and over 2500 feet. Plugged into solar for a 4 hour recharge at home.
      About time!
      Boycott oil!
      Don’t delay!

  9. Vic says:

    You may take away our tailpipes,
    but you will never NEVER take away our emissions!!!

    http://www.gtspirit.com/2012/12/13/video-tesla-model-s-doing-a-burnout/

  10. Tony says:

    Just google for “3rd generation Tesla” or “tesla secret plan”. Elon Musk himself has stated that their ultimate goal is to produce mass market electric cars. Their strategy was to start from the high end and work towards more affordable cars in greater numbers. First was Roadster, produced some 2k units. Now Model S with 20000 annual production rate. (Model X is based on this 3nd generation platform.) And their 3rd generation that is due in 2016-2017 will be a ~$30K and 200+ mile range “mass market” model, comparable to BMW M3 (if Model S is comparable to M5), according to Elon Musk. And more models after that. That’s the car I’m waiting for.

  11. prokaryotes says:

    North Carolina May Ban Tesla Sales To Prevent “Unfair Competition” http://www.slate.com/blogs/future_tense/2013/05/13/north_carolina_tesla_ban_bill_would_prevent_unfair_competition_with_car.html

    From the same book which wants to ban SLR.

  12. Louis says:

    In the second paragraph you describe Tesla’s Model S as a “roadster”. It is in fact a four door, five (or seven) passenger hatchback.