Tesla earns first profit -- $11 million in Q1

James R. Healey and Fred Meier, USA TODAY | USATODAY

Tesla, maker of high-dollar electric cars, reported its first quarterly profit Wednesday -- $11 million.

The car company noted in its letter to shareholders that it was the first black ink in the company's 10-year history.

Revenue was reported as $562 million, up 83% from the period a year ago. Under GAAP reporting rules, excluding a one-time gain, earnings per share were 0 cents, the company said..

The automaker said it sold 4,900 of its Model S electric sedans in the first quarter, up from the 4,500 it had forecast. The company said worldwide orders now are running at a 22,000-per-year pace. Tesla does not report monthly U.S. sales figures as other automakers do.

Tesla said it now has 34 stores and "galleries" around the world and that it plans 15 more this year, with half in Europe and Asia. The company said it expects to build about 5,000 Model S vehicles in the current quarter and to deliver "slightly over 4,500 ... all in North America." For the full year, Tesla raised its forecast from 20,000 to about 21,000 deliveries.

Analysts had raised the cost of production as a concern for Tesla meeting its operating margin goals and Tesla said in its earnings release that the time required to build a Model S sedan has been cut 40% from the end of last year to the end of the first quarter and that unit production was up 80%

Tesla also said that better inventory management had cut raw material cost by 26%, contributing $30 million in cash for the quarter.

The company said the efficiencies and higher production rate had raised its gross margin in the quarter to 17% from 8% in the previous quarter.

Tesla gets government zero emission vehicle (ZEV) credits for each car its builds, credits that can then be auctioned to other automakers to offset their non-zero emission vehicles. The company income from sales of ZEVs came to about $68 million in the quarter, or 12% of revenue.

It said it expects ZEV credit income to decline and that its continued guidance of a gross margin of 25% in the fourth quarter assumes no ZEV credit revenue. "It may turn out to be greater than zero, but we are not counting on it," the shareholder letter said.

Founder Elon Musk recently announced he will guarantee the resale value of Teslas, will cover anything that goes wrong with the battery pack even if the owner never reads the manual, as long as there's no deliberate abuse, and offers a program that lets a Model S owner get a loaner car if the Model S goes in for service -- which it can skip without violating the warranty.