Tesla beat estimates as shares jump 14%

Shares in Tesla Motors, the electric car-maker, hit another fresh high in after-hours trading on Wednesday, despite a quarterly retreat in revenues, as sales of its Model S beat expectations and deliveries began in Europe.

Shares of Tesla jumped 14% to $153.20 in trading after it reported results. Year to date, the stock has soared 300%. The auto maker, led by founder Elon Musk, reported net income of $26.3 million, excluding one-time items, that convincingly beat expectations for a loss of $18.9 million. That comes after it posted its first profit ever in its previous quarter, defying skeptics that it could become profitable.

Elon Musk, Tesla’s chief executive, said the California-based manufacturer had delivered 5,150 electric vehicles in the three months to June 30, above its forecast of 4,500, as Tesla expands into Europe and Asia. Tesla plans to open its first retail store in China later this year and made its first deliveries to Norway, Switzerland and the Netherlands this week.

“Growth in our home state of California remains very strong,” Mr Musk said. Tesla has attracted a devoted and influential following among Silicon Valley millionaires and Hollywood executives, which in turn has excited Wall Street investors about the growth prospects for the Model S and next year’s successor, the Model X, a sport utility vehicle. However, it faces growing competition from traditional automakers like BMW.

The CEO said on Wednesday that Europe represented a larger market for sedan cars than did North America. On a “conservative estimate”, if it can capture even half as much of the European and Asian markets as it has in North America, he said the Model S could reach a 40,000 run-rate by “late 2014” – up from a projected 21,000 during 2013. “That seems pretty reasonable to me,” he said cited by Financial Times.

Recently, Tesla has had few victories, such as a win in the battle against auto dealers when a North Carolina House committee denied a bill that would block Tesla from being able to sell its vehicles directly to the public.

Tesla has also started showing off new tech that could transform the electric auto industry. In June, Tesla unveiled a convenient alternative to waiting for a Model S to charge – battery swapping. The idea behind battery swapping is to easily open the car chassis to pull the battery out and replace it with a fully charged one. This saves the driver from having to wait for their battery to charge before traveling. After that, Tesla Chief Technology Officer JB Straubel said that the automaker is working on a charging system that would get drivers out of the Supercharger stations and back on the road with a full charge in just 5 minutes.

However, the electric warned of some issues with suppliers which need to be resolved. “That’s the thing that’s holding us back,” Mr Musk said, flagging $150 million of capital expenditure in the second half of this year, including a land purchase to expand its factory and rising research costs related to the Model X. “There is certainly room to grow beyond that.”