Tesla Store opening in Westfield Mall, London, Oct 2013Enlarge Photo
Tesla Motors released its first-quarter earnings this afternoon, logging revenue of $713 million on deliveries of 6,457 Model S electric cars.
That's essentially the number it had said it would sell in the quarter, but the total is slightly down from the record 6,892 sold in the prior quarter.
It built 7,535 Model S cars in the quarter, however, building inventories as it began shipping cars to China--where sales started last month--and continuing to roll out sales in various European countries.
Tesla Store Los Angeles [photo: Misha Bruk / MBH Architects]Enlarge Photo
The number of Tesla electric cars produced in the first quarter was roughly 2 percent above the prior guidance of 7,400 cars. During the quarter, net orders in North America grew 10 percent.
Production for the second quarter is expected to increase to a level of 8,500 to 9,000 Model S cars, with projected global deliveries of 7,500.
And Tesla expects to deliver 35,000 cars during all of calendar 2014, CEO Elon Musk said, as it continues to be limited not by demand but by production capacity.
By the end of this year, according to the shareholder letter, the company expects to be building 1,000 electric cars each week in its Fremont factory.
On a conference call for financial analysts and media, Musk noted that the company had made dozens of running changes to the Model S over the last year and half--and promised "some very exciting software updates" in the months to come.
Tesla will also launch the right-hand-drive version of the Model S next month in the United Kingdom--it opened a London store last October--and in both Hong Kong and Japan sometime during the summer.
Analysts were eager to hear anything the company has to say about early demand for the Model S electric car in China in the two weeks since it went on sale.
Tesla Motors CEO Elon Musk at Tesla Store opening in Westfield Mall, London, Oct 2013Enlarge Photo
In its shareholder letter, Tesla wrote:
Our entry into China has been greeted enthusiastically. After working for more than a year to secure proper government approvals, licenses and facilities, we delivered the first cars in China at customer events in Beijing and Shanghai last month. Each event enjoyed ample media coverage, complete with delighted Model S owners receiving their cars.
Tesla received further media attention thanks to the Shanghai government’s announcement that Model S drivers in the city will be entitled to free license plates, thereby avoiding the usual public auction price of $10,000 to $15,000 per plate. Since Model S pricing in China was already very competitive, this makes the car’s value proposition even more compelling.
2014 Tesla Model S in China
2014 Tesla Model S in ChinaEnlarge Photo
Government support crucial
In response to a question about what the "order book in China" looks like, and what volume China sales would contribute, CEO Elon Musk said he was "blown away" by the enthusiasm at all levels--from consumers to government officials--that he had experienced in China.
That enthusiasm is important to opening its sales and service facilities, too. The shareholder letter noted:
With the help of the Shanghai government, for example, we were able to construct a Supercharger station within just a few weeks of site selection. At the start of China deliveries we had three Supercharging sites open, each powered by clean electricity from solar panels.
"I really don't think we'll be demand-limited" in the country, he said. And, he said, "I really think we'll have to limit the number of cars we send to China" to avoid starving the rest of the world.