Tesla has reported its first-ever quarterly profit as Model S production hits full swing.
The company said it made about $11 million dollars in the first quarter of 2013. A huge chunk of that came from a bit of accounting magic: Tesla was able to eliminate from its balance sheet some $10.7 million in liabilities relating to its Department of Energy loans. It also benefited from the state of California’s cap-and-trade system, selling some $68 million in zero-emission-vehicle credits to other automakers.
Still, the profit marks a milestone for the start-up company given the enormous costs involved in introducing its first independently developed product. Even when Automobile Magazine named the Model S Automobile of the Year, we cautioned that we weren’t certain Tesla would survive to produce it in significant volumes. Tesla says it built more than 5000 copies of the Model S in the first quarter of 2013, putting it on target for its annual production goal of 20,000 vehicles.
Tesla says demand for the Model S has kept pace with the supply, thanks in part to its new financing deal. Later this year, it will start selling the car outside North America. CEO Elon Musk predicts Tesla can sell 10,000 vehicles per year in Europe and 5000 per year in Asia.
Tesla’s next challenge will be reducing how much it spends building the Model S. Its profit margin on the car is presently a slim five percent. Musk says production costs will continue to fall as Tesla gets better deals from suppliers—a result of higher-volume production—and improves the car’s design.
Tesla’s stock has risen to nearly thirteen percent, to nearly $70 per share, in afterhours trading.