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Tesla Motors Inc (NASDAQ:TSLA) Is Not What It’s Said To Be

Boston, MA 11/06/2013 (wallstreetpr) – The Q3 results which the U.S. electric vehicle maker Tesla Motors Inc (NASDAQ:TSLA) posted Nov. 5 were expected to attract a lot of observations from the market, and it did happen just that way. The maker of Model S sedan and future Model X and E reported figures which have widely been seen to be weak despite its efforts to expand production.

The third quarter results topped Wall Street and also came above estimates, however, its stock performance caved in the after hours on the browsers. This happened because investors were not just looking at good numbers which the company did deliver anyway, but for great numbers which the company failed to deliver. However, what has apparently escaped the attention of most investors who are worried about Tesla’s future is that the company is actually not faced with the demand challenge that other automakers are grappling with. Instead, the trouble with Tesla is about meeting that demand. So the constrain is in the production, not the market. And if production is the problem, it means that the next quarter and the subsequent quarters will have better results now that the company is doing all it can to boost production to meet the demand.

The greatest limit to Tesla’s production in the reported quarter is short supply of the lithium-ion battery cells which are needed in the making of battery packs for the electric vehicles. So far the company has entered into supply deals with other suppliers to ensure that its production is not limited by battery in future.

Tesla has a backlog of orders for its Model S in Europe and that region seems to be leading in demand for the company’s electric cars. It also plans to make foray into the China auto market next year. Tesla’s other hot cars Model X and Model E are expected to hit the market in late 2014 and 2017 respectively.

Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email (alanmasterson@wallstreetpr.com) or his Google+ page (https://plus.google.com/103338576216002376250).

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