Tesla Motors Inc (NASDAQ: TSLA) Performs Higher Than Expected In Q2

JP Morgan recently released a report that brought attention to the fact that Tesla Motors Inc (NASDAQ: TSLA) sold more electric vehicles than analysts expected during their second quarter in the 2014 fiscal year.

According to analysts at JP Morgan, the electric car company sold roughly 7,800 electric cars during the second quarter, while the expected number of cars was 7,500 units.

Additionally, analysts estimated that Tesla was to produce 8,000 units during the second quarter. About 1,000 of these vehicles were thought to have been shipped overseas to be sold in China and Europe.

The general opinion of analysts about Tesla is that the company appears to be at great risk to demand, execution, and completion. They also noted that the company’s stock valuation seems to be priced on the upside related to the company’s extension into mass market segments that are well beyond analysts’ volume predictions for Tesla’s Model 3.

JP Morgan also held their estimations of earnings of $0.07 per share, as well as their neutral rating and price target of $163 for the stock.

Upgrades To Tesla’s Production Facility

Monday, Tesla reported that they had stopped all production at its production plant, located in Fremont, California. This halt was to install 25 new production robots for its assembly lines. The company says that these new robots will increase the capacity for production by 25%.

Simon Sproule, the spokesperson for Tesla Motors, stated that the company put in $100 million for the robot upgrade. This has been the company’s biggest investment in the plant so far. This improvement will allow the electric car manufacturer to both increase its production of the Model S and prepare for the manufacturing of the Model X.

The company stated that the installation would take about two weeks, and would resume its plant’s activites after finishing the installation.

In the past, Tesla was able to produce 700 electric vehicles per week during the first quarter. Currently, the company is making 800 vehicles per week. After the installation of the 25 new robots, the company expects to be able to make 1,000 units of Model S per week. The company’s is aiming to make 35,000 Model S cars by the end of this year.

By 2020, Tesla plans to sell 500,000 electric vehicles all over the world, and has already begun to explore overseas markets, namely the United Kingdom and China. For the next half of the year, Australia, Hong Kong, and Japan are next on the company’s list.

U.K. Interest Growing

In addition to all the awards and achievements its electric cars have received, Tesla may gain a very important and prestigious order.

The United Kingdom government has shown interest in using Tesla vehicles for its convoy.

According to the British Department of Transport, the UK government would need to buy 150 cars if it were to go through with the order from Tesla. If this deal goes through, Tesla could get a major boost in its stock and an increase in consumer confidence.

However, this deal also proves to be a problem for Tesla. The United Kingdom government’s budget is £5 million, or roughly $8.6 million US dollars, to purchase 150 cars. This means that it can spend about £33,000 on each car. In the United Kingdom, one Model S vehicle costs £50,280.

Additionally, just a few days ago the Chinese government issued a decree stating that 30% of all government vehicles purchased by 2015 must be electric. Both these government demands for electric vehicles means possible profits for Tesla, and good news for the company.