Jan. 17 (Bloomberg) -- Tesla Motors Inc. surged the most since March after the company’s chief executive said production and sale of its all-electric Model S sedan won’t be delayed by two top engineers leaving the carmaker. Tesla plunged a record 19 percent last week after news broke of their departure.
“I’m highly confident we’ll deliver at least 20,000 cars” in 2013, Elon Musk, Tesla’s chief executive officer and biggest shareholder, said in a conference call today. “I’m highly confident we’ll do better than the delivery date of the first Model S cars being in July.”
Tesla rose 17 percent to $26.60 at the close in New York, the most since March 31. The shares on Jan. 13 tumbled the most since they began trading June 29, 2010, after Bloomberg reported Peter Rawlinson, Tesla’s vice president and chief engineer, and Nick Sampson, who supervised vehicle and chassis engineering, left this month.
Tesla, the recipient of a $465 million U.S. loan to make advanced autos, is to begin Model S luxury-car production at its Fremont, California, plant by midyear. The company has said initial units of the sedan will able to go as far as 300 miles (480 kilometers) per charge and will sell for as much as $92,400 before a $7,500 tax credit.
Musk apologized for how news of the departures became public, and said the company had planned to discuss the personnel changes when fourth-quarter results are announced on Feb. 15.
“A positive was misconstrued as a negative development,” Musk said. Tesla, which listed Rawlinson’s title on its website as vice president and chief engineer as of Jan. 13, has removed his corporate biography.
“He was not responsible for any of the powertrain electronics, software or other elements of the car,” Musk said. “I think his role was misunderstood by some as being chief engineer of the whole vehicle, but that was not the case.”
Musk, referring to Sampson, said he “asked basically for Nick’s resignation” because there wasn’t a “good fit for him within the organization.”
Shares of the Palo Alto, California-based company, named for inventor Nikola Tesla, are particularly volatile as Tesla remains an “unknown quantity” and the outlook for battery-powered autos isn’t yet clear, said Alan Baum, principal of Baum & Associates in West Bloomfield, Michigan.
“It is in a market, electric vehicles, that’s in the developmental stages, and it’s a start-up,” Baum said. “That makes it a very high-risk, high-reward company for investors.”
Goldman Sachs Group Inc. raised its rating on Tesla shares to “buy” from “neutral.”
“The recent pullback offers an excellent tactical buying opportunity,” Himanshu Patel, an analyst at JPMorgan Chase & Co., said in a note to investors today. The executive departures “will ultimately prove manageable.”
Amir Rozwadowski, a New York-based analyst with Barclays Capital, said Tesla’s fall on Jan. 13 was a “shoot first” reaction by investors. It “provides a rare buying opportunity ahead of what we believe will be a strong multi-year product cycle,” Rozwadowski, who has a “overweight” rating on the shares, said in a research note today.
The Model S is Tesla’s second vehicle, following its $109,000 Roadster, and is intended to expand the company’s sales volume with a base model starting at $57,400, before the tax credit. That version will go as far as 160 miles per charge. A small sport-utility vehicle, called the Model X, is also in development and will be shown Feb. 9, Musk said today.
Musk said on Jan. 13 that Jerome Guillen, formerly with Daimler AG, will assume Rawlinson’s duties, and that Tesla hired Eric Bach, a former Volkswagen AG executive, “to help in the final stretch of bringing Model S into production.”
Guillen and Bach are “better suited to this phase of Tesla’s existence than Peter and Nick,” Musk said.
To contact the reporters on this story: Alan Ohnsman in Los Angeles at firstname.lastname@example.org
To contact the editor responsible for this story: Jamie Butters at email@example.com