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Tesla Motors Inc (TSLA) Reports Sales of 11,500 Model S EVs as Bears Retreat

Tesla Motors Inc (NASDAQ:TSLA)

Tesla Motors Inc (NASDAQ:TSLA) beat sales forecasts for the second quarter. The firm said this morning that it managed to ship 11,500 Model S sedans in the three months through June, up from the 10,030 cars that the firm managed to get to Tesla buyers in the first quarter of the year.

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Tesla Motors said it would sell around 10,500 cars in the June quarter, and the firm’s stock is up on this morning’s pre-market as a result of the beat. Those betting against the stock think that demand for the EV will crash once the firms runs out of early-buyers.

Tesla Motors sees huge demand

The limit on Tesla Motors is, once again, the number of cars that the firm is able to make rather than the number of people that are willing to buy them. Bar a problem in China at the start of this year, which Elon Musk, the firm’s CEO, blamed on bad practice by some buyers in the country, the firm rarely has much inventory on hand.

The firm said it sold exactly 11,507 cars in the quarter. That’s well above the 10k-11k number the firm had put on deliveries when it revealed its most recent earnings numbers. There was a run up in the price of the firm’s stock after the release of the figures this morning as Wall Street bet on the success.

The number means that Tesla Motors increased sales over the second quarter of last year by around 52%, a growth rate that will need to stick around for a long time if the firm is looking to hit the 500k cars sold by 2020 target that CEO Musk has told the world he will hit.

On this morning’s pre-market shares in Tesla Motors were trading up by more than 2%. Since the start of the year shares have gained more than 20% and recently headed toward all time highs after the firm announced its PowerWall project and said it was on track for its next big release.

Trip Chowdhry, of Global Equities Research, reveled in the numbers from Tesla.In a report issued on Thursday morning he said that Tesla could easily sell more than 62,000 cars this year. He also reckons that the ASP, Average Selling Price, of the Model S will rise by 5 percent this year.

Mr. Chowdhry added that he thought Tesla produced 13,450 cars in the three months. He kept his price target of $385 on the firm’s stock.

Tesla bears fade

While Mr. Chowdhry celebrates the big numbers, some of his rivals are backing down. On the same day that Tesla Motors showed that demand for the Model S was still strong, the firm’s biggest detractor on Wall Street has quietened down. Bank of America Merril Lynch has handed research on Tesla Motors over to John Murphy. He’s still not looking for a boom in the firm, but he’s far away from the doom and gloom of John Lovallo who previously covered the stock for Merril

Mr. Murphy put a $180 price target on Tesla Motors shares. Mr. Lovallo had the Wall Street low on the firm’s shares at $65. Mr. Murphy said that the Gigafactory in Nevada is the same as “burying cash in the desert.” He added that Tesla would have problems with everything from Model X launch delays, its gross margin, demand in China and cash burn in the years ahead.

Mr. Murphy is a great deal more positive than his predecessor in his take on Tesla, however, and his close to 200% increase in the firm’s target shows that clearly.

The loss of the most bearish voice on Tesla on the same day the firm beat its own sales forecasts will be a nice boost to trader sentiment today, and the market seems to be reacting.

Tesla looks to the Model X

With Model S demand firmly on track to hit estimates for the full year, those with shares in Tesla Motors are looking forward to the release of the Model X. Mr. Musk says that the SUV EV will be built and shipped for the first time in the third quarter.

Brad Erikson, an analyst with Pacific Crest, visited the firm’s factory in Fremont California last week and said that the car’s production line was being put together.

The Model X is expected to make up the last 5,000 of the 55,000 cars that Tesla Motors says it will ship in 2015. Today’s numbers bring total sales of the car to 21,533 through June.

That 55k target involves ramping up unit production during each quarter, so the firm is still on track to hit that target despite having sold under half of its quota so far this year. Ryan Brinkman, of JPMorgan reckons that Tesla will sell around 50 units of its SUV before the end of the third quarter. He’s looking to see 5,050 units shipped by the end of the year.

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Paul Shea

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