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Something doesn’t add up at Tesla

Switched on: Tesla’s Model S is due in Australia potentially within the next few months.

Tesla's first profit in a decade propped up by forward orders

Tesla logo5 Apr 2013

By BARRY PARK

ELECTRIC car-maker Tesla is under fire after reports overnight that it had encouraged customers to pay up-front for cars that have not yet been built so it could turn a profit.

Bloomberg revealed that the California-based electric car company had sent email requests to buyers of its Model S sedan so that it could balance the books and generate its first profit in 10 years.

Tesla reported this week that it had delivered 4750 vehicles in the first three months of this year, while other figures show it was sitting on 15,000 orders in December last year.

But questions were asked after a Bloomberg interview with a Tesla owner revealed he had taken delivery for a car in March – despite only ordering it in December.

Bloomberg has speculated that customers were either jumping the queue, or Tesla had received a surge in cancellations and buyers wanting to delay their purchase.

“I’ve received an email ... they’re asking customers ‘please, please, please order in the first quarter’,” Bloomberg reporter Cory Johnson said.

According to the email, Tesla was “right on the cusp of profitability this quarter for the first time in 10 years since the company started”.

It then encouraged customers to stump up their payment for the car “in order for Tesla to be able to count your Model S for the quarter”.

Mr Johnson said pulling the orders forward to the first quarter would have a big impact on the company for the next quarter.

The suggestion that Tesla has tickled the numbers is not the first time such allegations have aired.

Earlier this week, the way the electric car-maker calculates the cost of owning one of its cars came under close scrutiny after it wrote off time spent caught in traffic or standing in petrol station forecourts as lost money.

Using Tesla’s calculator, the car-maker shows that the “True Cost of Ownership” calculator can reduce a $1500-a-month lease of its Model S to just $500 a month by including factors such as time saved while driving in transit lanes or standing at pumps filling a petrol tank.

According to Tesla’s default setting, a Model S owner’s time is worth $100 an hour, equating a 15-minute fill to about $25 worth of standing around.

“When considering the savings from using electricity instead of gasoline, depreciation benefits, and other factors, buyers will save hundreds of dollars per month compared to owning a gasoline powered car,” Tesla claims.

GoAuto attempted to contact Tesla via its US headquarters to ask about how it planned to sell the Model S in Australia, but received no response.

The two-seat Tesla Roadster was introduced to the Australian market in 2010, and initially priced from $222,995, or $260,535 for a more upmarket sports model, before adding on-road costs.

Early last year, a facelifted model cut the entry-level sticker price to a slightly more affordable $191,888.

The Model S, potentially due midway through this year, is expected to cost about $75,000 when it lands in Australia.

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