This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Why Tesla Is Serious About Its European Expansion

Stocks in this article: TSLA

Updated from 10:27 a.m. to include information from Morgan Stanley.

NEW YORK (TheStreet) -- Although the majority of Tesla Motors (TSLA - Get Report) Model S sales occur domestically, the company is getting serious about expanding into Europe. Tesla said it plans to open a slew of new Supercharger stations and service centers in Europe.

At the Geneva Auto Show, Tesla announced it would open more than 30 service centers and stores across Europe, while rapidly expanding the Supercharger network unveiled last spring.

Shares of Tesla were higher in early Tuesday trading, gaining 2.1% to $255.75.

The Model S has been incredibly well-received, both domestically and abroad. Tesla recently won the honor of being Consumer Reports top car in 2014, after having been recommended by the publication in 2013 as well. In 2013, the Model S was named Sweden and Norway's Car of the Year, as well as winning the Most Stylish Car award in Switzerland, and the Car of the Year Prize of Honor in Denmark. Judging by those award wins, it's clear that European consumers are serious about the Model S, and now Tesla is providing the infrastructure necessary for them to drive the car.

The Supercharger network is key to Tesla's expansion not only domestically, but also abroad, as it alleviates "range anxiety," the feeling drivers get when the battery is low and there is no place to recharge. Tesla CEO Elon Musk noted that the rapid expansion of the Supercharger network is important to European travelers. "By the end of this year, we expect you will be able to travel almost anywhere in Europe using only Superchargers," Musk said in the press release.

Though Tesla delivered more than 22,000 cars to customers worldwide, the company was supply constrained in the third quarter, with the automaker having to "starve" demand in North America to feed Europe. It looks like that issue was partially solved in the fourth quarter, as Tesla delivered 6,892 Model S units, and had a 25.2% non-GAAP gross margin for the quarter.

However, the company still remains slightly supply-constrained. For the first quarter, Tesla said it expects to produce about 7,400 Model S units, up from 6,587 in the fourth quarter of 2013, yet due to the number of cars in transit to Europe and Asia, Tesla will deliver about 6,400 vehicles in the first quarter.

Despite that, Musk has said in the past that Europe is expected to pick up in the coming quarters, due to the sheer number of people waiting for Model S vehicles there. However, the company also has other issues in Europe, largely because of charging issues.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs