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Sales of Tesla Motors‘ Model S electric sedan have exceeded the target that the Palo Alto, Calif.-based automaker set in February, giving it enough of a boost to claim its first quarterly profit.
Tesla has sold 4,750 Model S cars or about 250 more than the February target. The better than expected sales allowed Tesla to predict “full profitability” in an amendment to its guidance for first-quarter performance.
After Tesla had reported a loss of $75 million in the fourth quarter, observers had expressed concerns about the automaker’s ability to quickly churn out enough electric vehicles to sustain it in the long term.
Those concerns remain, but rising interest in the car among prospective buyers was viewed as great news by the company.
“I am incredibly proud of the Tesla team for their outstanding work,” said Elon Musk, Tesla Motors co-founder and chief executive.
“There have been many car startups over the past several decades, but profitability is what makes a company real,” Musk added. “Tesla is here to stay and keep fighting for the electric car revolution.”
Tesla’s announcement comes as its main rival in the luxury electric car market, Fisker Automotive, continues to struggle.
Fisker has hired Kirkland & Ellis, a major bankruptcy law firm, to review the company’s options while it continues to seek investment partners.
At least one observer said that Fisker’s woes aren’t necessarily a plus for Tesla.
“Ultimately, more competition is a good thing,” said Alec Gutierrez, senior analyst for Kelley Blue Book.
“Fisker’s troubles could send the message to some people that the electric car is just not ready. The more successful electric car makers out there the better in terms of increasing sales,” Gutierrez said.
Musk had already pledged to ramp up the introduction of its Model S to consumers worldwide, saying Tesla was “on a journey” this year to expand the line and turn profitable.
In March, Tesla announced that it had again pushed back the release of its next vehicle, the Model X crossover SUV, by a full year to late 2014.
A company spokesperson said at the time that Tesla had decided to focus instead on the Model S.