The Tesla Model S, the celebrated yet controversial electric car is reporting better than expected sales in the month of February
The Tesla Model S boasted sales that exceeded their expectations, and they are discontinuing their lowest-range model.
The Tesla Model S, the celebrated yet controversial electric car is reporting better than expected sales in the month of February:
Tesla Motors announced today that sales of its Model S vehicle exceeded the target provided in the mid-February shareholder letter. As customers who note their Model S serial number this weekend will realize, vehicle deliveries (sales) exceeded 4,750 units vs. the 4,500 unit prior outlook. As a result, Tesla is amending its Q1 guidance to full profitability, both GAAP ["generally accepted accounting principles"] and non-GAAP.
Tesla also announced that they will discontinue the 40 kWh (40 kilowatt hours) model, because it only accounted for 4% of sales. The 40 kWh battery pack was the smallest that Tesla offered, with a range of 160 miles. The new floor for the Tesla Model S will be the more popular 60 kWh battery pack, which provides a range of 230 miles on a single charge. The Tesla Model S is still very much a luxury car: it costs $52,400, or, if you would rather pony up for 85 kWh (260 mile range), that will cost $72,400.
It remains to be seen whether Tesla can break through to a more mainstream market. To do so, they will have to lower their production cost (heavily dependent on their battery cost), and perhaps deal with a looming issue: it's not at all clear that electric cars beat hybrids in environmental terms, even over the life of the vehicle. The issue is the construction and replacing of the battery, which requires fossil fuels, the very thing that environmentalists are trying to avoid. If Tesla can create a battery that doesn't need to be replaced, or does only very infrequently, then electric cars could win out as the most environmental car, but until then, that's an open debate.
Tesla, however, is doing just fine so far with a really cool vehicle that never needs to stop at a gas station.