Tesla Motors is on a roll. After a long period of waiting for its new Model S all-electric sedan in late 2012, the vehicle earned raves and awards from numerous automotive magazines. Maybe it helps that the company is creating a network of its Superchargers, solar-powered chargers that can charge half of Tesla vehicles batteries in half an hour, starting on key highway spots. And now the EV manufacturer, founded by PayPal founder Elon Musk, plans to report its first positive quarter ever.
On Monday, April 1, Tesla said that sales of its Model S vehicle have already exceeded the target the company provided in its mid-February shareholder letter. The company said its vehicle deliveries (sales) have already exceeded 4,750 units, whereas the company previously guided 4,500 vehicles. The results spurred the company to revise its first quarter 2013 guidance to full profitability, both on a GAAP and non-GAAP basis. The news drove the company’s stock up 16 percent on Monday.
"I am incredibly proud of the Tesla team for their outstanding work. There have been many car startups over the past several decades, but profitability is what makes a company real. Tesla is here to stay and keep fighting for the electric car revolution," said Musk. "I would also like to thank our customers for their passionate support of the company and the car. Without them, we would not be here."
When the company introduced the Model S it planned to offer it with three different batteries, a 40 kilowatt hour version, 60 kWh version and a 85 kWh version. When it announced the higher-than-anticipated sales, it also announced that it would not manufacture the model with the smallest battery. “Only four percent of customers chose the 40 kWh battery pack, which is not enough to justify production of that version. Customers are voting with their wallet that they want a car that gives them the freedom to travel long distances when needed,” the company said.
The company said those that ordered the 40 kWh batteries will receive a model with a 60 kWh battery, but the vehicle’s software will limit the vehicle’s range to that of a 40 kWh model unless the owner or a future buyer wants to extend the range.
The company also announced that all Model S' will include the Supercharger hardware. It uses a different plug than other EV chargers. But the car can also be charged with other EV chargers, which can’t charge as quickly. The company also offers free charging to its Supercharger customers. “Tesla is taking a slight cost risk that ultimately all customers will want to buy the Supercharger upgrade and receive unlimited, free long distance travel for life,” it said.
Tesla Motors is one of a few new automotive manufacturers committed to building entirely electric-powered vehicles. One other US-based high-end EV manufacturer is Fiskar, but that company is still struggling to gain traction. Tesla started with the Roadster, a sports car that used some Lotus technologies, but was designed by Tesla. Now it’s focussed on its new Model S and the forthcoming Model X, a crossover SUV. It seems that the car manufacturer may now be really on to something.