Tesla Motors Inc ended the quarter as the top selling rechargeable auto maker in North America. Its 4,900 Model S deliveries exceeded the 4,421 sales of GM's Chevy Volt plug-in hybrid and 3,695 deliveries of Nissan Motor Co.'s Leaf.
Tesla posted its first quarterly profit as sales of its battery-powered Model S sedan surpassed those of General Motors Co.'s Chevrolet Volt. First-quarter net income totaled $11.2 million from a loss of $89.9 million a year earlier, Tesla said Wednesday.
Excluding some items, the profit was 12 cents a share, compared with a year-earlier loss of 76 cents. The average estimate of 10 analysts surveyed by Bloomberg was for a profit of 4 cents.
The company's revenue surged to $561.8 million from $30.2 million in the year-earlier quarter, which was before Model S production began. Tesla said it sold 4,900 Model S cars in the first quarter. The company said March 31 that deliveries of the sedan exceeded 4,750 for 2013's first three months, better than its prior forecast of 4,500.
The company today raised its full-year forecast to about 21,000 Model deliveries from 20,000. Tesla shares have surged 47 percent since March 31. "We exceeded our own target for deliveries," Tesla CEO Elon Musk and Chief Financial Officer Deepak Ahuja said in a statement posted on the company's website. "2013 is off to a strong start."
The profit is a milestone for a company that has been at the center of debate over the future of electric cars. Tesla has been counting on the Model S to deliver the electric-car maker's first profit.
Zero-emission credits
A big chunk of Tesla’s first-quarter revenue and profit came from $68 million in zero-emission vehicle credits sold to other automakers. Without the ZEV credits, Tesla would have posted a net loss of $57 million for the quarter.
In a conference call, Musk discounted the ZEV credits as basically a one-time gain. He said Tesla's ZEV credits will slide to nearly zero by year end as market demand for the credits becomes saturated by the end of the third quarter.
Musk believes that, even without the ZEV credits, that Tesla will achieve a 25 percent gross margin return by the end of the fourth quarter, “unless we really screw the pooch.”
Much of that fatter margin will come from economies of scale from suppliers tooling up factories for more volume, now that Tesla has demonstrated it’s a viable business, Musk said.
“A lot of them didn’t believe we would do these numbers, and they didn’t tool up to the level of production,” Musk said in the conference call with analysts. “Some thought we would do 3,000 total [vehicles] over life of product. Then it’s, ‘Yeah, we did that last quarter,’ so now they are tooling up.”
Tesla is so confident of its manufacturing capabilities this quarter that it raised its guidance for the year by 1,000 cars. Tesla now says it expects to ship 21,000 Model S cars, instead of 20,000. Tesla says it is receiving orders of over 20,000 cars per year.
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