Electric car manufacturer Tesla’s stock jumped in after-hours trading today after the company announced the first quarterly profit in its 10-year history and record sales of over half a billion dollars in the first quarter of 2013.
CEO Elon Musk said in a letter to shareholders that sales were up 83 percent from last quarter to $562 million as Tesla delivered 4,900 electric vehicles. In addition, gross margin doubled from 2012 to 17 percent, thanks to better use of raw materials, smarter inventory management, and a reduction in the hours required to build each car by 40 percent over the quarter.
The result was a first-ever profit of $15 million. And the future looks bright as well.
“We are pleased with the strong global demand for Model S and are currently receiving orders at a rate greater than 20,000 per year worldwide,” Musk wrote in the letter. “We are seeing orders in a particular region increase proportionate to the number of deliveries, which means that customers are selling other customers on the car.”
U.S. demand alone will be greater than 15,000 cars/year, Tesla estimates, with global demand double that, including 10,000 in Europe and at least 5,000 in Asia.
Investors received the news well, as the stock jumped 31 percent in after-hours trading, going from an in-day low of $55 to an after-hours high of $72.30.
The goal, Tesla says, is to bring electric vehicles to the mass market by making them affordable to all, or at least a wider swath of the car-buying public. Musk and company promised cheaper electric vehicles in the very next model:
“The Model S is priced substantially lower than the Roadster, and our third generation vehicle will again be priced much lower than the Model S.”
Tesla currently has 34 stores and “galleries” around the world, where potential buyers can view the car, and it plans to open 15 more in 2013. In addition, it has 41 service locations, to which the company plans to add another 30 in 2013. Of course, for electric vehicles, charging technology is critical, and the company is building out new charging stations currently, with “a major announcement” expected in the next few months.
In other good news, Tesla ended the quarter with more cash on hand, $231 million, than it started with — despite the fact that it made a second Department of Energy loan repayment of $13 million.
I’m guessing the DoE is much happier with Tesla than it is with Fisker, which recently became the worst VC-backed debacle in U.S. history in addition to burning through almost $200 million of government money.