Tesla aims to leave troubles in rear view mirror

Headline-grabbing electric sports car manufacturer Tesla Motors distanced itself from recent reports of financial difficulties last week, announcing that it was "on track" to become profitable by the middle of the year and was set to reignite production plans for its next electric car, the Model S sedan.

Writing on the company's blog, chief executive Elon Musk said that the combination of cost reductions and an increase in production to fulfil its bulging order pipeline meant it " appears highly likely that Tesla will meet the goal promised to those investors of becoming profitable by mid-year".

He said the company – which late last year ousted its chief executive, laid off staff, turned to previous investors to raise $40m (£28m) in additional funding, and announced it was delaying plans to build a new production plant for the Model S – had now delivered 200 Roadsters and had more than 1,000 customers awaiting delivery.

He observed that "while we have had some cancellations due to buyers experiencing personal financial difficulties, new orders continue to flow in every week from the US and Europe", adding that the company's full production run for 2009 would soon be sold out.

The company is also on track to unveil the first "street-drivable" prototype of its Model S four door saloon at an event next month and has received notification from the Department of Energy that it could release funds in response to a $350m loan application from Tesla to help build a planned production plant for the new car within four to five months.

"The Obama administration has thankfully made it a top priority to move quickly on the Advanced Technology Vehicles Manufacturing loan program, as this will both generate high-quality jobs in the near term and lay the groundwork for a better environment in the future," Musk said. "This will keep us on track for production to start in 2011."

In addition to plans for both the Model S and a new version of the Roadster known as the Roadster Sport, Musk outlined ambitions to build on the company's recent deal to provide Daimler with battery technology for a new electric version of its Smart car.

He said that pending the results of the planned 1,000 strong test fleet, " the relationship could expand to tens of thousands of cars per year", adding that "the deal is likely to be the first in a series of strategic partnerships between Tesla and other auto manufacturers to engineer and produce electric cars ".