Tesla Narrows Quarterly Net Loss As Sales Climb

Tesla Motors Inc. posted a $31 million net loss in the second quarter of 2013 compared with $106 million in the first quarter of last year.

Revenue soared $405 million from $27 million a year earlier when Tesla was preparing to launch its Model S electric sedan.

The company generated $51 million in revenue from the sale of zero-emission credits in the April-June period, down 25% from the first quarter of 2013. Tesla had no such revenue a year earlier because it was winding down sales of its electric Roadster.

From the first quarter to the second, deliveries rose 5% to 5,150 cars, thus surpassing the company's goal of 4,500 units. About 30% of Tesla customers used the company's new lease-like financing in the April-June period.

Accounting rules mandate that Tesla spread the income from such sales over the three-year lease term. As a result, the company was required to defer $19 million in gross profit generated during the latest quarter.

Tesla's preferred measure of profitability earnings before lease accounting, one-time charges and non-cash items totaled $26 million in the second quarter compared with a $93 million loss a year earlier. The company earned $15 million on that basis in the first quarter of 2013.

Tesla boosted factory output to nearly 500 vehicles in the second quarter from 400 in the first three months of the year. The company expects production to continue to grow in the current quarter despite some supply chain bottlenecks.

But Tesla cautions that many of the vehicles it builds this quarter will be in transit to Europe, thus delaying some retail deliveries and revenue until later this year.

CEO Elon Musk confirms the company's previous forecast that will sell about 21,000 cars in 2013. Tesla, which just began delivering the Model S in Europe, reports rising orders from that market. Musk says that if demand for the car in Asia is similarly strong, the company could reach an annualized sales pace of 40,000 vehicles by the end of next year.