Suddenly, Tesla Motors has altered the competitive landscape of the fledgling electric car market as the company records a substantial first quarter 2013 profit.
Share analyst comments on Tesla’s remarkable first-quarter sales.
Tesla Motors has altered the competitive landscape of the fledgling electric car market.
Not only did its $11-million first-quarter profit shatter the assumption that no automaker can make money selling small numbers of plug-in cars, it posted a 17% gross profit margin, using American workers, in an industry where 10% is considered outstanding.
“There’s a tremendous amount of enthusiasm for this car and this company in California, which we don’t see here on the other side of the continent,” said Theodore O’Neill, founder of Connecticut-based Litchfield Hills Research. “How far can Tesla go? As far as they want to go.”
The company sold 4,900 electric cars over the first three months of the year compared with 4,244 Chevrolet Volts and 3,539 Nissan Leafs over the same period. Musk said Tesla’s gross profit margin should increase to 25% by the end of the year.
In contrast, Ford’s first-quarter profit margin in North America hit 11%, a result that both the company and analysts thought was a sign of strength.
“It has many of the elements of a tech stock,” said Jeremy Anwyl, vice chairman of Edmunds.com. “(Investors) are making a bet on Elon. Wall Street was enamored with the cult of personality.”
Still, some analysts question whether Tesla can manage its rapid growth while developing an affordable electric car for the masses.
“We would be skeptical about those claims,” said Cosmin Laslau, a mobile energy analyst for Lux Research. “We don’t think there’s a magical pathway to reduction in lithium-ion costs.”