Tesla Shares Reach Peak
The Tesla shares have been on the rise for a couple of months now. After a second consecutive profitable quarter, they are now at an all-time high.
The electric vehicle manufacturer reported its first-ever quarterly profit earlier this year, after a couple of years of losses. This was because they were able to sell a couple of hundred of vehicles more than they had previously predicted, resulting in a net income of $15 million. This news was a huge surprise, considering that Tesla was having a lot of financial troubles and it was on the verge of a bankruptcy on several occasions. But, it was a good indication of the potential that the company has and it encouraged investors to keep supporting this innovative electric car maker. Now, the time has come for Tesla to release its second quarter results, and they are once again quite favorable.
With a net income of $26 million, this is the second consecutive profitable quarter for Tesla Motors, something that was not expected by a lot of people, albeit the good first quarter. Tesla's second-quarter profit is quite a surprise, considering that everyone, except people working at Tesla, expected it to report a loss of over $15 million. But, they reported that their shares have jumped 14% at $153, which means they have more than doubled since the end of the first quarter of 2013. Although it was expected for Tesla to report a loss of 17% per share, their report shows earnings of 20% per share.
These highly positive figures are result of increased Model S sales during the second quarter. Even though the Tesla Model S is quite expensive, with a base price of $70,000, consumers have started to realize that owning one has a lot of advantages, including the fact that it's a zero-emission vehicle, and that it has a better range than most electric vehicles. In addition, Tesla has reported that there is an increased demand for the Model S outside of the United States. They hope to sell a couple of hundreds of units in Europe by the end of year, and they will try and boost sales in Asia next year.
Another fact that helped Tesla record a second consecutive profitable quarter is that they were able to reach a production target of 500 units per week, which is very good news, considering that the inability to hit production goals was one of the most serious problems Tesla was facing in the past.
Now, as Tesla has finally become profitable, its next goal is to start producing entry-level models, that will be much cheaper than the luxury models it has been making so far, and will cost about $30,000.
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ABOUT THE AUTHOR
By Jordan Perch, automotive researcher and blogger at DMV.com.