Tesla Motors Inc (NASDAQ:TSLA) Shares Continue To Increase

Tesla Motors Inc (NASDAQ:TSLA) Shares Continue To Increase

Monday saw shares of Tesla Motors Inc (NASDAQ:TSLA) continue their upward surge as it went up by 14.4 percent. Shares of the company have increased by 57 percent after the company reported its first-quarter earnings.

The recent increase follows the gleaming review the Tesla Model S received from Consumer Reports magazine. The earnings report elated investors as the company went up against the notion that automakers will not earn through the sales of plug-in vehicles.

The level of enthusiasm for the car and Tesla Motors Inc (NASDAQ:TSLA) is high, according to Litchfield Hills Research founder Theodore O’ Neill. Despite its remarkable first quarter earnings, the fate of the company is linked to the Tesla Model S, which has a range of around 300 miles on a single charge.

The company has shown that it is capable of turning in a profit from one product, whose price is beyond the budget of most consumers. It also remains to be seen if the demand for its electric vehicles will continue or will reach its limit.

Elon Musk, the CEO of the company, revealed that the company aims to produce a more affordable Tesla model in the future. The first three months saw 4,900 Tesla electric vehicles sold, which is higher than the 4,244 and 3,539 of Chevrolet and Nissan respectively.

The gross profit margin of Tesla Motors Inc is expected to increase to 25 percent this year. Edmunds.com vice chairman Jeremy Anwyl said that the company appears to be a tech stock, and investors have confidence on Elon. Around 21,000 units are expected to be shipped by the company this year.

Musk added that the company will get things in order before they make a significant increase in production. However, with the entry of new luxury plug-in vehicles may have an impact on the sales of the company. The Cadillac ELR is expected to be released by General Motors early next year.

Aside from selling vehicles, the company is also making money out of zero-emission credit sales to other manufacturers. Auto manufacturers selling over 60,000 units annually are required by California to sell zero-emission vehicles. If the manufacturers do not meet the requirement, they can acquire the credits from other companies.

Zero-emission credit sales of Tesla reached $68 million for the first quarter, which is equivalent to 12 percent of the revenue of the company. The California Air Resources Board indicated that the sales of the credit do not affect the results of Tesla Motors Inc (NASDAQ:TSLA) since other auto manufacturers do not finance the success of the company.

Posted by James Fried on Wednesday May 15 2013, 12:22 PM EST. Ref: USA Today. Link. All trademarks acknowledged. Filed under Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0