Tesla Motors (TSLA) Model S Reservations Increase Dramatically; TSLA Ramps Up Production

February 15, 2013

Tesla Motors (TSLA) will hit a run rate of 20,000 electric cars produced annually, production expected to meet a dramatically increased number of reservations now that Tesla’s Model S won the Motor Trend Car of the Year a few months ago, says Ben Kallo, Senior Analyst at Robert W. Baird & Co.

“[Tesla] is the first successful new car company in decades, and they continue to succeed. There are about 30 stores out there, but probably 99% of the population has never even seen a Tesla. They project they will sell 20,000 cars in 2013, and that success will accelerate demand for the car,” Kallo said.

Kallo says the production ramp-up will drive costs down, and Tesla is currently working on producing a moderately priced car in the $35,000 range, which would also help sales, creating a species of snowball effect where sales drive more sales. He also says TSLA currently has the best electric car technology out there, the primary reason of which is the battery.

“The Tesla Model S goes 300 miles on a charge versus a Nissan Leaf, which goes 70 miles to 100 miles on one charge. I think that battery range makes a big difference when people are deciding which electric vehicle to purchase. They want enough range to take away the anxiety of running out of power while they are driving somewhere,” Kallo said.