In a letter sent out to Tesla fans today, CEO Elon Musk lets the faithful know that the company will be profitable and it plans to press full steam ahead.
Musk targets the middle of this year for profitability and says the company will open six retail stores throughout the United States in 2009. And the Model-S, which Musk says will cost less than $50,000, will be ready next month.
It’s a great story, but Valleywag is claiming it’s simply a fantasy. According to the notoriously unreliable site’s sources, Tesla only had $9 million in cash in October of last year, and it’s been unable to restructure its debt to handle its financial difficulties. Doing some back of the envelope maths, Valleywag disputes the idea that Tesla could possibly be profitable.
Regardless, Tesla says it restructured its debt, and it is on track to be profitable. In order to meet its goals, though, it will need a large slug of government cash. The company is optimistic that the Department of Energy will give Tesla $350 million. Now that the stimulus will be passed, the Department of Energy will be sitting on a pile of cash that it wants to disperse quickly.
Getting that money will be crucial to starting production of the Model S by 2011, and getting the company to profitability.