No Joke, Tesla Motors Turns a Profit
4/1/2013 by: Anshel Sag
Tesla Motors [NASDAQ:TSLA], yesterday, announced that the sales of the Tesla Model S actually exceeded expectations of 4,500 unit deliveries with a delivery of over 4,750 units. This is as Tesla begins to understand how they need to optimize their manufacturing process to get the fastest time of manufacturing while still maintaining a very high level of quality that is expected from an American car manufacturer. As a result of this change, Tesla is amending their Q1 guidance to full profitability for both GAAP and non-GAAP.
Entrance to Tesla HQ
We visited Tesla at their HQ last week and had a real good heart to heart chat with them to talk about where they see the company going as well how they see themselves. We learned a lot about the company, the people, and the manufacturing that goes on within Tesla. Unfortunately, we were not able to visit the factory in Fremont but we did get a behind the scenes tour of the HQ. The one biggest take away from our whole tour is that the majority of the press, ourselves included, have made the false designation that Tesla is a car company. When in fact, Tesla considers themselves a technology company with cars built around their battery technology among other technologies.
Inside of Tesla's HQ
Some really interesting news from yesterday's announcement was that Tesla will not be manufacturing the smallest battery option of the Model S due to a lack of demand. Only four percent of all Tesla Model S owners ordered the smaller battery pack for their vehicles, which is not enough to justify production of that version. As a result, all people that ordered a 40 kWh battery will be getting a 60 kWh battery that is software limited to 40 kWh. It can also be upgraded to the 60 kWh pack if the owner wishes to do so, but will not dilute the value of the people that paid for 60 kWh versions.
They also announced that all 60 kWh vehicles that have been and will be built with Supercharger included. This means that Tesla is taking a bit of a risk that people will want to buy the Supercharger upgrade and receive free, unlimited power for long distance trips (while the infrastructure catches up). This hardware and the Supercharger network enable Tesla owners to drive up and down the coasts like from San Diego to San Francisco. This is an interesting option for all Tesla Model S owners to consider when buying a Model S, however it will still cost them money to upgrade to.
Tesla's stock skyrocketed today on yesterday's news and is about to close at $43.93 or up 16%, a gigantic jump in the stock's price and a 52-week high. The stock peaked as high as $46.54 earlier in the day. Overall, today's news is great for Tesla as a company, brand, and a product. We're still waiting to see what Elon will be announcing later this week if he says that he has an even bigger announcement than the one made yesterday.
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