Tesla Charges Up on Model S Sales - Analyst Blog
03 April 2013 - 9:00PM
Zacks
Tesla Motors Inc. (TSLA) is so pleased with its
better-than-expected sales of the Model S electric sedan that the
company now expects to be fully profitable in the first quarter of
the year, rather than the prior guidance of modestly profitable,
excluding non-cash option and warrant expenses. The news sent the
stock to 52-week high of $46.68 on Apr 1.
Sales of Model S in the first quarter were more than 4,750 units,
exceeding the guidance of 4,500 units. The same Model S was the
center of controversy in February following an article published in
the New York Times. The article detailed the result of a
test drive that raised many questions about the viability of
electric cars such as Model S, but the report's validity was
aggressively challenged by Tesla.
Initially, Tesla launched two all-electric models, Roadster and the
Model S, with a price tag of $109,000 and $49,900, respectively.
However, the company has phased out Roadster later due to its
higher price tag and weak demand, and started relying solely on
Model S to rejuvenate its market share. According to Environmental
Protection Agency (EPA), Model S can travel up to 265 miles on a
single charge of its 85-kilowatt-hour (kWh) battery pack.
In 2012, Tesla lost $396.2 million or $3.69 per share compared with
$254.4 million or $2.53 per share in 2011. Due to a good start in
2013, the company now plans to repay its $465 million U.S.
Department of Energy (DOE) loan much earlier and boost vehicle
production to lower costs.
Tesla made its first DOE loan repayment of nearly $13 million in
December last year while the second payment is due this month. The
company expects the deliveries of Model S to go up to 20,000 this
year.
Tesla also denied plans of producing Model S with a smaller battery
pack (40 kWh) due to lack of demand, It will not be a viable option
as well because consumers would not have the liberty to travel long
distances. Instead, the company would provide a 60 kWh batter pack
vehicle to the customers, which will have the improved acceleration
and top speed of the bigger pack.
Tesla currently retains a Zacks Rank #3 (Hold). While we remain
on the sidelines about Tesla, stocks from the same industry that
warrant a look include Visteon Corp. (VC),
Gentherm Incorporated (THRM) and Denso
Corp. (DNZOY). All of them carry a Zacks Rank #1 (Strong
Buy).
DENSO CORP (DNZOY): Get Free Report
GENTHERM INC (THRM): Free Stock Analysis Report
TESLA MOTORS (TSLA): Free Stock Analysis Report
VISTEON CORP (VC): Free Stock Analysis Report
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