The stock of
Tesla Motors, Inc.
) surged 16.3% to $162 per share after the electric carmaker
revealed that vehicle sales in the fourth quarter of 2013 were
20% higher than estimated. The company sold and delivered 6,900
vehicles in the quarter, compared to the guidance of 6,000 units.
Sales were also significantly higher than 5,500 cars sold in the
This is the highest sales recorded by Tesla. The combined
efforts of the company's production team and its key suppliers,
especially Panasonic, helped it to surpass the guidance.
The contribution of suppliers is notable as Tesla has been
facing a shortage of lithium-ion battery cells, which is limiting
its production capacity. Consequently, the company is facing
trouble in meeting the rising demand for its Model S.
Tesla is working on overcoming this constraint. In Nov 2013,
the electric carmaker extended its supplier agreement with
Panasonic, whereby the latter will supply around two billion
automotive grade lithium-ion battery cells to Tesla over the next
four years. This is enough to produce around 300,000 cars. The
company is also mulling over opening a cell and battery giga
factory to boost cell production.
Meanwhile, the demand for Tesla's cars remains strong on
robust performances and impressive designs of its products. Model
S ensures the least possibility of injury to passengers among all
major car makes and models in the U.S. The car won a five-star
vehicle safety rating from the National Highway Traffic Safety
Administration, which is awarded to only 1% of the cars tested.
Moreover, the safety score of this sedan exceeded the scores of
most sports utility vehicles and minivans.
Further, Tesla holds the record of not having any deaths or
permanent injuries to passengers in any of its cars, during the
six years that its cars have been in the market.
The outstanding performance of Model S in cold weather also
contributes to its rising demand. The high traction control
provided by its electric powertrain leads to better performance
of the car in snow and ice, compared to a gasoline powertrain. As
a result, Tesla has the highest per capita sales in Norway.
Tesla designs and manufactures electric vehicles and electric
vehicle powertrain components for partners including
Toyota Motor Corporation
Tesla currently carries a Zacks Rank #4 (Sell). A
better-ranked automobile stock is
), which carries a Zacks Rank #2 (Buy).
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