Tesla Motors Inc (TSLA) As a Technology Company…

Will Google Inc (NASDAQ:GOOG) actually get in the car business? It’s tough to say. No one ever thought that the company would offer broadband to consumers, but they are going to in a few U.S. cities. They’ve been in talks with Tesla about licensing its driverless technology, although Elon Musk says that Google’s system is not yet a priority.

Google’s going to expand its business beyond just search and web services, there is no doubt. Since 2010, the company has boosted its research and development spending 78%, to $6.8 billion. Expect to see that number continue to increase as Google tries to expand its proportion of revenue outside of what it calls “Advertising Revenue” which totaled $43 billion for 2012. Outside of ad revenue? The company only made $2.3 billion in 2012, which is a scant 5% of revenue . Diversification is important.

Tesla’s Feeling Good

Perhaps Musk isn’t at all bristled by the idea of the Hyperloop taking anything away from Tesla. The plan appears to sweep car buyers from existing manufacturers. In fact, Tesla Motors Inc (NASDAQ:TSLA)’s revenue from car sales in 2012 was $385 million, a 160% increase from 2011.

In fact, Tesla’s automotive sales have been impressive as of late, with the company beating the likes of Chrysler, Volvo and Cadillac, among others in California for a 12% market share. While the company will need to do better in markets other than California to be successful, it would not be surprising to see good revenue increases for 2013 as well.

Tesla saw a $30 million profit last year, and it’s looking likely that they will do better this year. Operational costs need to drop, as total costs of revenue at $383 million is almost as much as their $385 million in car sales. What helped them was their development services revenue at $27 million to bring some profit numbers instead of a loss for once. Could the Hyperloop affect Tesla? Maybe someday, but right now it appears to be on a trajectory to take market share from incumbent higher-end carmakers, and not the market for mass transportation.

The article Will the Hyperloop Cannibalize Tesla’s Business? originally appeared on Fool.com is written by Daniel Cawrey.

Daniel Cawrey has no position in any stocks mentioned. The Motley Fool recommends Apple, Google, and Tesla Motors (NASDAQ:TSLA). The Motley Fool owns shares of Apple, Google, and Tesla Motors.

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