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Tesla reports Model S sales exceed Q1 target; Q1 profitability; 40 kWh pack cancelled

Tesla Motors reported Q1 vehicle deliveries of more than 4,750 Model S units—exceeding the 4,500-unit Q1 target provided in the mid-February shareholder letter. (Earlier post.) As a result, Tesla is amending its Q1 guidance to full profitability, both GAAP and non-GAAP.

Tesla also announced that the small battery option for the Model S (earlier post) will not enter production, due to lack of demand. Only 4% of customers chose the 40 kWh battery pack, which is not enough to justify production of that version, the company said. The Model S originally offered three pack sizes: 40 kWh, 60 kWh and 85 kWh.

The customers who ordered this option will instead receive the 60 kWh pack, Tesla said, but range will be software-limited to that of a 40 kWh. It will still have the improved acceleration and top speed of the larger pack, and can be upgraded to the range of the 60 kWh upon request by the original or a future owner.

Tesla also announced that all 60 kWh cars have been and will be built with Supercharger hardware included; activation will require an upgrade. Tesla said it is taking a slight cost risk that ultimately all customers will want to buy the Supercharger upgrade. Supercharger is Tesla’s quick charging technology. Initially Tesla had positioned the Supercharger hardware as standard on Model S vehicles equipped with an 85 kWh battery and optional on Model S vehicles equipped with a 60 kWh battery.

I am incredibly proud of the Tesla team for their outstanding work. There have been many car startups over the past several decades, but profitability is what makes a company real. Tesla is here to stay and keep fighting for the electric car revolution.

—Elon Musk, Tesla Motors co-founder and CEO



There is a message here from the U.S. drivers to all EV makers, especially Nissan: "Build cars with enough range to remove the fear of being stranded.

Nissan wonders why sales are low...Well!, it's because you sold a "PR 100 mile car" that's really a 70 mile car.

Tesla understands the idea that batteries lose power over time and that a new car's range rating can be down to 70% of the new car rating in 5-10 years. That's part of their reason not to offer the low-range, 40kw, car.

In the case of the Nissan Leaf, a 70% reduction could drop the realistic range another 21 miles to a total of 49 miles. Now the car becomes a city car instead of a commuter.

Tesla understands the battery range problem; and, I think Nissan does also; but, Nissan doesn't have a solution...yet!

It will take a more energy dense, less-costly battery to satisfy Nissan's problem of producing a low-cost, mid-size sedan with a decent range. So far, it hasn't solved the problem.

Account Deleted

Great that Tesla is now making money. Also great that they are doing 2000 new cars per month so shortly after starting production of their first mass produced car. They clearly have very competent employees.

By dropping the 40kwh option it also means that Tesla can build a fast-charging network faster and at lower cost as the chargers do not need to stand as close together to serve the range of the available Tesla models. And all Tesla's will come with fast chargers so the network will see usage faster than if not all models came with that charger. Tesla's fast charger network will give them the competitive edge when other car makers ready their EVs but do not have any fast charging network to support the selling of their cars.


The notion of a fast charger network for a single car brand is nonsense. They should establish a standard that everyone should use, and not have proprietary ones owned by individual companies.

At the very least, other players should use the same standard as tesla, who got there first.

@Lad, the reason the leaf has a small battery and the Model S has a large one is that the leaf costs < 30K and the Model S is > 60K. Also, it is a much larger car.

Anyway, it is probably a good idea to get rid of the 40K option if nobody was buying it.

Dave R

A few notes base on the previous comments:

I own a LEAF, and after almost 2 years / 17k mi of ownership, I don't know if I'd even call it a 70 mile car. It certainly isn't at "normal" freeway speeds of 70-75 mph. Case in point, I drove 68 miles over the weekend at 60-65 mph with the A/C on (mild weather, so wasn't using much power) and got home with perhaps 5 miles of range left. If I drove 70-75 mph that would have knocked up to 10 miles of range off, leaving me with perhaps 60 miles range.

I agree that building a brand-specific QC network is senseless. A better use of resources would be to build stations using industry standards and simply give your owners free access to the chargers and make everyone else pay - even if others have to pay a premium at the very least it gives others an option in emergencies.

Account Deleted

Industry standards takes time to get approved everywhere and since nobody can make money thinking out a really good standard you end up with suboptimal technology. Tesla has the brightest heads in this business but they need to make money so they do a system that is proprietary and all others will have to pay money to license it afterwards. Industry standards does not make business sense for those who create it and that is the big problem with industry standards. Eventually patents runs out and Tesla's charger technology can become the de facto industry standard. From a business perspective I think that Tesla is doing the right thing by making their own proprietary charger technology.


Wasn't there some loser from some loser party calling Tesla a loser?


when Tesla preannounced the Model S and started taking orders, they were very clear that they would fulfill the highest trim orders first, so that nudged the most enthusiastic early adopters to get the maxed out version, and probably suppressed demand for the 40Kwhr version. That said, yep, if I wanted the fanciest electric car in the world, I'd probably want the full range too. I wonder how often they will rev the battery cell technology in their battery packs? It seems like Panasonic and the like can keep adding 10% more incremental charge every couple of years just with minor evolutions in annodes, cathodes, membranes and electrolyte.


Tesla' S-120 and S-150, with over 400 and 550 miles between charges should be available by 2017/2018.

Batteries for those two new model should not weight more than those used in the current S-60 and S-85.

Both the S-60 and S-85 will be dropped in favor of the S-120 and S-150 in less than 5 years.

Kit P

"I drove 68 miles over the weekend ..."


For some BEV seem to think they are doing the world a favor by burning more fossil fuel than just staying home.

Dave R

@Kit P - Obviously life goes on. One could live in a cave eating moss and berries, but that wouldn't be very satisfying. I could have driven the other car "normally" and burned quite a bit more fossil fuels instead of the solar powered LEAF, but instead chose to drive a bit more efficiently to make use of the BEV.

What's wrong with that? Easy to judge from your armchair...

Perhaps I should have picked up a loan and got a Model S instead - then no problems driving 68 miles normally, but that car is quite a bit less efficient than the LEAF, especially considering that it burns 3-5 kWh a day just sitting there in the garage.


Early electric vehicles such as the Miel, Leaf, Tesla etc should not be used the judge the capability of future electric vehicles. It is like comparing an early 1900 Model T with a 2013 ICEV or an early Bell phone with today's Intelligent Cell phones etc

Post 2020 autonomous EVs, with ultra quick charge storage units good for 500+ miles range, will make ICEVs look like something from the past that nobody will want to buy.


Corection....MIEL should read MIEV....

Kit P

"What's wrong with that?"

There is environmental impact associated with driving.

“but that wouldn't be very satisfying ”

What is the satisfaction in driving 68 miles on the weekend? I stayed home finding satisfaction in working in the garden.

I am waiting for a little honesty in the BEV community. Why not just say you have more money than you know what to do with and love useless gadgets?

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