The California-based automaker is still yet to turn a profit, despite buying a former General Motors plant in 2010 in a bid to reduce costs and taking solid orders for vehicles across the Tesla range.
Reduced production costs are vital to Tesla’s success in the industry because no matter how many people think EVs are a good idea, profitability will only come if its vehicles can compete on price with conventional brands and their cars.
Tesla vice president Gilbert Passin told industry journal Automotive News that Tesla spent $US42 million ($40.3 million) on the ex-GM plant, then a further $US17 million ($16.3 million) for presses, machinery and used equipment. With Automotive News suggesting the average North American auto plant exceeds $US1 billion ($961 million), Passin and his team appear to be doing well.
The plant originally opened in 1962 and has seen the likes of Chevrolet, Buick, Oldsmobile and Pontiac roll out its doors. It currently employs about 600 people with Passin saying that number will reach between 1200 and 1500 by the end of 2012.
Tesla’s size compared with other manufacturers grants the team flexibility, with the factory able to handle its own metal stamping, plastic injection moulding and painting, while also assembling instrument panels, centre consoles, seats, battery packs and motors all in-house.
While Tesla has the financial backing of Toyota and Daimler, the company still had $US189 million ($181.6 million) of its $US465 million ($447 million) Energy Department federal loan remaining as of February.
Passin says Tesla is on track to build about 5000 cars this year and 20,000 in 2013.