It's Electric! Tesla Motors Shifts Into Profitability
You may have barely heard of it, but Tesla Motors (TSLA) is on a roll.
A business can't have a much better week than this.
The maker of high-end electric cars posted its first-ever quarterly profit, received Consumer Reports' best-ever score, and now sees its stock price soaring.
Let's start with that review from Consumer Reports. The magazine gave the Tesla Model S a near perfect score –- 99 out of 100.
The magazine says the Model S is tied for the quietest vehicle ever tested. It also received top scores for acceleration, braking, "pinpoint" handling, and a well-crafted interior.
The only drawback is the time it takes to charge the battery –- as long as 12 hours –- and the limited range compared to conventional gas-powered cars.
As for the company's quarterly earnings, Tesla posted a profit of $11.2 million, reversing the loss of a year ago. And revenue soared to $562 million from $30 million.
The company says it expects to sell 21,000 Model S vehicles this year, as it tries to become the first successful auto startup in the U.S. in 90 years.
By contrast, other electric car start-ups have faltered. Fisker Automotive has fired most of its workforce and has not turned out a car since last summer, and Coda Holdings filed for bankruptcy protection last week. It has sold just 100 of its all-electric cars.
The biggest problem Tesla faces right now is the high cost of its cars. The Model S starts at around $70,000 and goes up to more than $100,000 for a better battery and other add-ons. Buyers do get a $7500 tax credit.
Tesla is expected to introduce a new model later this year, a crossover SUV. And down the road, it's expected to offer a less expensive car.
Consumer Reports says the car gets between 180 and 225 miles between electric charges, depending upon weather and driving conditions.
Part of Tesla's allure to investors is the history of its founder and CEO, Elon Musk. He's also the co-founder of Pay-Pal and chief technology office at SpaceX. Many profiles refer to him as a visionary businessman.
Tesla's stock soared as much as 24 percent this morning, and it's now doubled in price so far this year. But there are still plenty of doubters out there who continue to short the stock. They believe it's in for a big reversal.
One final note from Consumer Reports' rave review: It says the Model S is "what Marty McFly might have brought back in place of his DeLorean in 'Back to the Future'."
-Produced by Drew Trachtenberg