Tesla Jumps on Early Sedan Debut, Daimler Supply Deal
Tesla Motors Inc. (TSLA), the electric-car company founded by Elon Musk, rose the most in six weeks after the company said its Model S sedan will ship ahead of schedule and that a supply agreement with Daimler AG (DAI) may boost sales.
Tesla gained 9.6 percent to $32.96 at the close in New York, the most since March 26.
The Palo Alto, California-based company said yesterday it’s advancing Model S sedan deliveries to June, rather than July, and that it has more than 10,000 orders for the battery-powered vehicle. The new contract to supply components for an electric Mercedes-Benz model may be worth more than $280 million, Chief Financial Officer Deepak Ahuja said on a conference call.
The startup named for inventor Nikola Tesla wants to be the leading producer of premium all-electric vehicles with the addition of the Model S, followed by the Model X sport-utility vehicle in 2013. The addition of those products and supply agreements to Toyota Motor Corp. (7203) and Daimler may bring Tesla’s first profit by next year.
“At this relatively early stage, things do look promising for Tesla,” said Ed Kim, director of analysis for Tustin, California-based AutoPacific Inc., an industry researcher. “Coming out ahead of schedule with Model S, securing orders and deals, they’re attaining the goals they need to.”
Tesla yesterday also raised its second-quarter revenue forecast to $560 million to $600 million, from $550 million to $600 million, citing the revised schedule for Model S deliveries.
“We are increasingly confident of achieving a 25 percent gross margin in 2013,” Musk, Tesla’s chief executive officer, said yesterday on a conference call.
Tesla’s first-quarter loss widened from a year ago to $89.9 million with the end of sales of the battery-powered Roadster sports cars. Excluding some items, the loss was 76 cents a share, compared with 44 cents a year earlier, Tesla said.
The average of 11 analysts’ estimates compiled by Bloomberg was for a loss of 70 cents. The net loss compares with a $48.9 million deficit a year earlier. Revenue dropped 38 percent to $30.2 million from the year-earlier quarter.
The Model S, with a range of as much as 300 miles (483 kilometers) a charge, depending on the battery pack purchased, should expand Tesla’s sales volume to at least 20,000 cars, Musk said. The car’s $57,400 base price, before a $7,500 U.S. tax credit, is half that of the Roadster, which Tesla has sold since 2008.
Tesla’s agreement with shareholder Daimler is “to create an entire electric powertrain for a new Mercedes-Benz EV,” Musk and Ahuja said in a statement yesterday. “This program is expected to exceed in value the sum of all powertrain agreements signed in Tesla history.”
The combined value of past supply deals is about $280 million, and this would be “north” of that, Ahuja said on the conference call.
The project, with a vehicle due by 2014, would be Tesla’s third with the Stuttgart, Germany-based automaker, following the supply of components for Daimler’s electric Smart cars and Mercedes A-Class hatchbacks. Revenue from it may occur as early as this year, Musk said.
Toyota, another investor in Tesla, previously agreed to pay the company $60 million to develop lithium-ion batteries for an electric RAV4 SUV and another $100 million over three years to supply powertrain equipment.
RAV4 EV’s Pricing
Toyota said this week that it will sell 2,600 of the vehicles for $49,800 in California, starting this year.
Toyota’s pricing for the RAV4 EV “is a bit on the high side,” Musk said on the call, without elaborating. Tesla is in talks with Asia’s largest automaker to expand the program, he said.
“The odds of scaling up are good,” Musk said, without elaborating.
Toyota’s focus for now is selling those 2,600 units, John Hanson, a spokesman for the carmaker’s U.S. sales unit, said in a phone interview.
“I believe there will be talks about expanding the project, but there haven’t been formal discussions,” Hanson said.
The Model S is being built at Tesla’s Fremont, California, plant that was previously a joint-venture owned by Toyota and the former General Motors Corp. The factory, partly funded with a $465 million federal loan, is also producing battery packs and motors.
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