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Tesla Motors Earnings Beat Changes Everything

Tesla Motors (TSLA), defying all analyst expectations, reported Q1 EPS of 12 cents per share, beating the average analyst expectation of 3 cents per share, raised 2013 guidance for Model S’ sales to 21,000 and announced that were it not for production constraints, Tesla could sell significantly more Model S vehicles. This unexpected “big news” caused Tesla’s stock to jump 30 percent after hours to a new 52 week high of $72.00.

Tesla Model S financing is a big deal

When asked about the impact of Tesla’s new financing on demand, Tesla CEO Elon Musk noted that the majority of luxury sedans are financed, and that the rate being offered to Tesla had produced an increase in the reservation rate, and would be beneficial to long-term demand going forward. By offering financing, and bringing down the monthly cost for a Model S to $580, after removing the savings from not buying gas, Tesla has expanded its total addressable market by 10 million people in the United States. Most analysts, notably Morgan Stanley, are currently expecting Tesla to deliver 18,000 Model S vehicles in 2013 and 20,000 in 2014, with minimal growth going forward. Analysts are making a huge mistake assuming the addressable market for the Model S are buyers of “high end luxury sedans” who are opting to be included in the even smaller “electric car market.” As I mentioned in my article, Tesla Model S Owners Could Realize Amazing Savings, anyone who can afford a mid range, $30,000-40,000 sedan can afford to buy a Model S.
More http://seekingalpha.com/article/1418871-tesla-motors-earnings-beat-changes-everything?source=google_news

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