Can Tesla Make Money? Don't Discount the "Wheee!" Factor

(MoneyWatch) 

There are now 200 high-performance electric Tesla Roadsters in customers' hands, but still at least 1,000 waiting for their keys. This situation is producing pent-up demand: in September, some eager beaver paid $160,000 for a used example of this $109,000 sports car.

I encountered my first East Coast Tesla being polished in a lower Manhattan exotic car dealership this week. It's a harbinger of what is to come: According to spokeswoman Rachel Konrad, Tesla (which is building its own dealer network) will open a New York showroom as early as April.

The company has already signed leases on space in Chicago and London. "We could have worked with existing sports car dealerships," Konrad said, "but their mechanics would have opened the hood and said, 'What's that?'"

Tesla completed a $40 million financing round in December, but the company says that most of the money came from existing investors, including CEO Elon Musk and the co-founders of Google. A few newcomers are in the mix. Tesla is aiming for profitability by the middle of the year. Konrad says that it has embarked on "an aggressive cost-down program" for the roadster, and is hoping that economies of scale will kick in as production ramps up from 15 cars per week now to 30 by the spring.

Waiting in the wings is the second Tesla, the Model S sedan, and the company says it will get that one in production 24 to 30 months after it receives funds from an expected $350 million Department of Energy loan.

The climate would not appear to be ideal for relatively pricey green-tinged carmakers like Tesla and Fisker, but their cars have a little something extra: neck-snapping performance. "Would you like to know what smooth, nearly instant torque feels like?" asked the Washington Post's Warren Brown. "Wheeeeeee!"

Tesla Motors photo