Tesla sold a record 5,500 electric cars in the third quarter, turned a profit

Tesla Roadster electric car photo
CC BY-ND 2.0 PluginAmerica/Flickr

Selling all it can make

It wasn't very long ago that Tesla was a tiny startup making only a few dozens of very expensive electric Roadsters (pictured above) per month. The strategy was always to start up-market and use that to bootstrap the next model which is cheaper and higher-volume, and so on until mass-market.

But their prospects seemed uncertain before the great recession of 2008-2009, and when that hit, many pundits and experts wrote them off completely and said that they were going out of business for sure (and they nearly did). Few could have predicted that a few short years later, the American EV startup would be profitably (on a free cash flow basis, anyway) selling thousands of electric cars. In fact, the limiting factor on sales right now is supply; Tesla is selling all the electric cars that it can make, and one of its biggest challenges according to Elon Musk, the CEO, is to scale up fast enough (see the recent battery deal with Panasonic).

Right now, there over 19,000 Model S out there driving in excess of "700,000 miles per day in over 20 countries and have now driven their cars more than 100 million miles". That's a lot of electric miles!

© Tesla

Q3 2013

So Tesla just released its third quarter results, here are some highlights (Elon Musk writes these letters to shareholders):

We are now producing 550 cars per week with improved process controls which consistently result in high quality cars. Consequently, we finished the quarter with a record of slightly over 5,500 deliveries, including over 1,000 deliveries to European customers. Production in the quarter significantly exceeded deliveries in order to fill the pipeline of vehicles in transit to Europe and provide cars for service and marketing uses.

That last part is important: Production "significantly" exceeded deliveries. The 5,500 total deliveries in the quarter actually don't represent all EVs made. In fact, North-American sales are being held back by the need to sell in other markets.

Another important development: The company began to take reservations in China for the first Model S deliveries there in Q1 2014. This could be a huge market for EVs, obviously.

They also teased us with an "upcoming announcement" about service which, they say, will "revolutionize the
customer experience". Their customer service is already pretty special, in good part because Tesla states that it doesn't want to make money on service, so there's no incentive for them to make sure your car needs to spend a lot of time in the shop...

The Supercharger network now has 31 stations open in North-America, with more being added all the time.

The stock is down about 15% today, but mostly because Wall Street expectations were sky-high and couldn't be exceeded forever. It's probably good for the company to have a correction in the stock and reset expectations to a more realistic level. All that matters in the long-term is for the company's actual operations to be good. The stock will take care of itself.

Youtube/Screen capture

Third generation goodies

One interesting thing to point out that I think it overlooked: When Tesla gets to its third generation EV, the one that will sell for about half the price of the Model S and be made in the hundreds of thousands... The battery cost improvements, thanks to economies of scale and new manufacturing technologies, will also benefit the other models. The Model S will get an upgraded battery pack, either cheaper, or longer range, or a mix of both. Chances are that over time the Model S (and Model X on which it is based) will come down in price and get a longer range.

Via Tesla Motors

See also: "I'm living proof the Model S is the safest car ever made!"

Tags: Electric Cars | Electric Vehicles

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