Tesla May Lose Money Building Electric Cars, Or It May Not

One of the most contentious points in coverage of electric-car maker Tesla Motors is its financial performance.

On the one side, analysts and naysayers note that the company continues to lose money.

CEO Elon Musk himself has admitted that the company won't turn a profit using Generally Accepted Accounting Principles (GAAP) until 2020 or later.

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That requires Tesla [NSDQ:TSLA] to raise more capital periodically, as it said two weeks ago it would do again: It plans to offer up to $640 million in new stock to bolster its cash reserves.

As of the end of June, its reserves and receivables together had dipped to $1.1 billion--perilously close to the $1 billion level it considers to be the necessary minimum to run its business.

On the other side, however, Tesla fans, advocates, and shareholders have suggested that the company makes as much as $20,000 profit on each car it sells.

That's hard to verify, as some of the more indirect costs for each vehicle can be allocated in any number of ways. No carmaker routinely discusses its costs or profits on a vehicle.

The successive years of losses, fans say, are a result of continually investing in new product development--the Model X that is to launch next month, and then the high-volume Model 3 car.

Those investments include its massive Gigafactory for lithium-ion cell and battery pack production, with the first one now under construction outside Reno, Nevada.

Depending on production volume for its cars and also its new home energy-storage business, it says, Tesla might need to build additional gigafactories within a very few years.

Investments also include its continuing expansion of the Supercharger DC fast-charging network offered free to all Tesla owners.

Proponents of those two points of view have been battling fiercely for years now on investment sites, technology blogs, and other venues--including Green Car Reports.

But as an Autoblog article reminds us, both sides of the debate have considerable validity.