The Economist reports that Elon Musk, Tesla’s boss has announced a profit of $11.2m in the first quarter on unexpectedly strong demand for its new Model S sedan (pictured above). The results were well above the forecasts of even the most optimistic analysts; Tesla made a profit despite repaying $13m of the $465m it has borrowed from America’s Department of Energy.
All 5,000 of the battery-electric vehicles Tesla produced during the first quarter were sold in the United States. But as it gears up to expand its overseas markets later this year, Mr Musk is signalling that things could get even better. The company now forecasts that it will produce 21,000 sedans in 2013, a 5% increase over its initial estimate, and anticipates shipping 5,000 to Europe and another 1,000 to Asia.
In a letter to shareholders, Mr Musk noted that a “stabilised” manufacturing operation has helped reduce the number of man hours needed to produce a vehicle by 40% since the end of last year. Just as importantly, customers have been opting for the more expensive versions of the Model S, including one with a range of almost nearly 300 miles (480km), more than three times that of most of its competitors, including Nissan’s Leaf. Tesla has now decided to drop the basic model of its sedan.
Mr Musk has been very visible in recent months, among other things announcing innovative new programmes that are designed to reduce concerns about electric propulsion. These include a “no-fault” battery warranty and a guaranteed minimum price for trade-ins. On May 9th, Consumer Reports gave the Model S a 99 out of 100-point rating, the highest score in six years and matched only once before by the Lexus LS600.
