Tesla Motors Inc. shares soared in extended trading after the electric car maker delivered a strong fourth-quarter performance and said that it expects sales of its vehicles to increase sharply this year.
The Palo Alto, Calif., company said Wednesday that it expects to deliver more than 35,000 of its Model S sedans in 2014, up 55 per cent from last year.
That compares with a forecast from an industry analyst at Barclays that the company would produce 29,800 in 2014.
Tesla investors focus heavily on the car maker’s forecasts as demand has outstripped its supply in the past. The company said battery cell supply will continue to constrain its production but expects that should improve in the second half of the year.
It had previously said that its sales in the October-December period were the highest in its history, with almost 6,900 Model S delivered. That was well ahead of the just over 5,500 it sold in the July-September period.
The Model S, which starts at $70,000 and can go up to 300 miles on a battery charge, is Tesla’s only vehicle on the market right now.
To meet the rising demand, the company plans improvements at its lone factory, a former Toyota-General Motors plant in Fremont, Calif.
CEO Elon Musk told analysts on a conference call Wednesday that Tesla is building a new final assembly line that will allow it to increase production to more than 1,000 cars per week from the current pace of 600 a week.
The new line will be in place by around the end of September. Tesla also is building a separate body-construction line to make the plant more efficient and ramp up for the Model X, a new electric SUV that it will start producing later this year.
“We’ll be able to ramp our production rate quite a bit with a very small increase in hiring,” Musk said. “Our labour efficiency essentially is likely to improve a lot over the course of this year.”
During the fourth quarter, Tesla posted a loss of $16.3 million, or 13 cents per share, far smaller than a loss of $89.9 million, or 79 cents per share, in the prior year.
Tesla, which argues that these figures do not reflect its true performance because accounting rules limit how it records revenue for leases, earned 33 cents per share on an adjusted basis. That far surpassed analyst expectations of 23 cents per share, according to FactSet.
Revenue more than doubled to $615.2 million from $306.3 million. Analysts had forecast $683.9 million.
Tesla got a boost for the quarter from improved margins thanks to lower costs and said that it expects those gains will continue as volume grows. It also expects to cut costs for batteries in coming years through a new production facility.
The company’s stock jumped 12 per cent, or $23.70, to $217.34 in after-hours trading following the announcement.
The company also said it expects most of its growth to come outside of North America, with sales in Europe, China and elsewhere roughly twice the size of American sales.
Musk said Tesla will have further news on the battery factory next week. He told analysts that because of the company’s huge stock price appreciation, it would be a “smart move” to create fresh capital to build the factory, but he didn’t give any details. Tesla stock is now worth more than five times what it was a year ago.
Musk also hinted that Panasonic, its current battery supplier, would likely be a partner in the factory.
Musk also said that when reports surfaced about two Model S fires on U.S. roads last fall, the company saw a significant drop in demand. But he said as customers became aware that the cars were safe and less likely to catch fire than gasoline-powered cars, demand came back. Both cars’ batteries caught fire after hitting metal debris in the roadway, one in Tennessee and the other near Seattle.
The U.S. National Highway Traffic Safety Administration is investigating the fires and is determining if a recall is necessary. But Musk said he expects a “positive result” from the investigation.
AP Auto Writer Tom Krisher contributed to this report from Detroit.