Tesla gets ready for the next chapter

The Tesla Model S is introduced at the 2013 North American International Auto Show in Detroit, Jan. 15, 2013. STAN HONDA/AFP/Getty Images

Tesla Motors (TSLA) is in many ways exactly where you'd expect an automaker to be a few years after releasing its first car. The electric vehicle maker is trying to ramp up production and is building a highly anticipated new factory. It's dealing with service and quality issues in its early models -- a point hammered home by Edmunds in a review this week -- and it's trying to get better.

But in so many other ways, Tesla stands alone. For one thing, people are excitedly ordering its still-in-development Model X even though they haven't seen it, don't know how much it costs or when it's coming out.

"We will not have a demand issue," CEO Elon Musk said Thursday evening in a call with analysts. "We can drive up demand at will."

The call was refreshingly informal compared to the typically well-choreographed earnings report from the Fortune 500. There was no script -- and quite a bit of stammering and rambling responses as a result -- along with some joking about Musk's upcoming appearance on "The Simpsons" and even some salty language from an analyst asking why some manufacturers are supporting hydrogen fuel-cell technology.

There was also discussion about chemistry, energy density and battery technology, and it's clear Musk is deeply involved with development and production at every level. What investors mostly wanted to hear, however, is an update on some of the biggest issues facing Tesla right now.

Here's a rundown of the automaker's progress:

Production: Tesla hopes to deliver 100,000 vehicles a year by the end of 2015. Recently, it's been producing about 800 cars a week, and has just installed a new assembly line in its California factory that should bump capacity up to more than 1,000 vehicles per week. That goal for next year, by the way, equals just 1 percent of General Motors' (GM) total deliveries for 2013.

The "Gigafactory": Not since Willy Wonka has a factory generated this much enthusiasm. Tesla hasn't yet said where it plans to build its large-scale battery manufacturing site, known as the Gigafactory. Several states are bidding for the $5 billion factory, including Arizona, California, New Mexico and Texas. Tesla is breaking ground on multiple sites as it chooses a final location, saying that "any duplicative investments are minor" compared to the revenue lost if factory delays hurt the launch of the upcoming Model 3.

China: The company's expanding business in China is a hot topic for Tesla investors. The Model S is already being sold in the country's largest cities, and Musk said he eventually expects about 40 percent of sales to come from Asia. Tesla wants to open 100 service centers in China by the end of next year. Eventually, Musk said he expects more than 300 service centers worldwide.

Deliveries: Tesla said it would deliver 7,500 Model S units in its second quarter, though analysts thought the total could go as high as 7,800. The company said its actual deliveries came in at 7,579.

Profit and revenue: Tesla beat expectations for earnings, which were 11 cents a share in the quarter, excluding some costs. Analysts were expecting 4 cents a share. Revenue was $769 million, a 90 percent jump from a year earlier. Analysts were expecting revenue of around $824 million.

Forecast: The company lowered its outlook for revenue and deliveries in the third quarter, disappointing some investors on Twitter. The company said it had to shut down its factory for two weeks in July to add a final assembly line, which lowered its third-quarter deliveries forecast to 7,800 cars from 9,500.

In other words, it was mostly business as usual for Tesla in the quarter, and investors didn't seem too fazed by the report. Tesla shares were flat in after-hours trading from their $223.30 close Thursday. Shares have soared 66 percent in the past year.

  • Kim Peterson

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