Tesla Motors Inc (TSLA) Outsells Other Luxury Automakers

Page 1 of 2

Electric car technology is catching on with consumers. CNN reported that Tesla Motors Inc (NASDAQ:TSLA), known for its pricey electric car, the Model S, sold 4,750 units in the first quarter of 2013. Within the “large luxury car segment,” it sold more units in the first quarter than competitors with similarly priced models, such as Daimler‘s  Mercedes-Benz S-Class, the BMW 7-Series, and Volkswagen‘s  Audi A8.

Tesla Motors Inc (NASDAQ:TSLA)

Tesla’s successful and bumpy road

Tesla Motors Inc (NASDAQ:TSLA) was profitable for the first time in the first-quarter of 2013 with sales of $562 million, up 83% from the previous quarter. Its GAAP profit was $11 million. The quarter saw unit production and deliveries rise more than 80% — 5,000 vehicles were produced in the quarter and 4,900 were recognized as revenue.

Model S buyers receive a $7,500 federal tax credit and Tesla Motors Inc (NASDAQ:TSLA) guarantees, “a resale price in three years that is the highest of any premium sedan brand made in volume.” Consumer Reports recently tested the Model S and declared it the best car it has ever tested, giving it a total of 99 points out of a possible 100. Uncertainty on the car’s ability to travel long distances was the only downside noted by the publication and is one that is currently being addressed by the company.

Credit: Tesla Motors Inc (NASDAQ:TSLA)

The company expects a gross margin of 25% in the fourth-quarter of 2013 without any ZEV, or zero emission vehicle, credit revenue. Tesla Motors Inc (NASDAQ:TSLA) is able to generate revenue by selling its ZEV credits to other automakers, which are required by law to have ZEV credits by either manufacturing zero emission vehicles or purchasing credits. The sales growth for 2013 is estimated at about 300% and over the next five years is around 32%. The average EPS for 2013 is estimated at $0.04 per share and for 2014, it is $1.04 per share.

BMW faces head winds

In comparison, BMW’s 7-series saw a drop in worldwide deliveries by 30% in the first quarter of 2013. Overall, BMW sold more cars in the first quarter than last year by 5%. The company faced several challenges, such as lower consumer spending in the U.S. and the crisis in Europe. Results from China were promising as the first quarter’s largest car market with a growth rate of 22.4%. Since the beginning of 2013, the number of vehicles delivered grew 5.8%, the highest sales figure ever for the first five months of the year.

BMW’s remaining growth rate for 2013 is expected to come out of emerging markets and to be about 3.4%. According to Yahoo! estimates, growth for 2014 and beyond is almost 3%. Full year 2013 EPS is estimated at $7.77 and for 2014, $7.98.

Page 1 of 2