TSLA data by YCharts

With Tesla’s first quarterly profit in the company’s decade-long history last quarter, Tesla proved to skeptics that it’s been able to transition from a niche electric car maker into a more mainstream auto company. While Tesla will no doubt face hurdles as it offers two more models in the coming years, the company is far less risky than it was back in Fall of 2012, before it has cranked up its Model S production into 400 cars per week.

Over the past year, the amount of short interest (the amount of shares that investors have sold short, expecting the stock to drop in price) in Tesla has been nothing short of remarkable — it was 40 percent of available shares as recently as April 19. But now as Tesla’s stock price has been rising these short sellers have been forced to buy more shares, causing the stock to rise even more.

The result has been a massive three-fold jump in Tesla’s stock price from the $30′s a year ago to over $100 today. Tesla went public in the Summer of 2010 at $17 per share. For the Tesla teams’, and Tesla CEO Elon Musk’s, ambitions, it’s only the beginning.

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Most notably, Reuters reported Friday that Fisker founder and former CEO Henrik Fisker has teamed up with Hong Kong mogul Richard Li in an effort to buy Fisker’s remaining $171 million in loans from the Department of Energy, so that Fisker won’t have to go bankrupt. The duo are offering between $25 million and $30 million for the loan, which would represent a discount of 17.5 cents on the dollar.

That isn’t the only low-priced bid for Fisker. A competing bid is a pre-packaged bankruptcy deal of $20 million from Chinese auto giant Wanxiang and Bob Lutz’s VL Automotive.

The other new project comes from Fisker’s former CEO Tom LaSorda, who only led Fisker for about 6 months. LaSorda has teamed up with racing investor Roger Penske to create a VC fund called IncWell, according to Bloomberg Business Week.

LaSorda told the publication that they probably wouldn’t invest in electric cars unless “unless I can get a good deal with Tesla,” and also said that they would not invest in another company founded by Henrik Fisker. LaSorda put his own money into Fisker.

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That’s a telling metric for all of Tesla’s former haters, as well as recently converted fan boys. Tesla still has hurdles ahead of it as an independent auto maker, but the company has made it through the Valley of Death and emerged with its first quarterly profit in a decade, and a hot electric car that’s sold out for months.

In contrast, electric car maker Fisker Automotive, which took a loan from the same government program that Tesla did, could reportedly be sold for $20 million, and still owes the government $171 million. Check out my comparison piece: Tesla, Fisker, and what could have been: A tale of two electric car startups.

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Tesla’s CEO Elon Musk said a couple months ago that Tesla planned to pay off the rest of Department of Energy loan in five years, instead of the allotted ten. Now, according to a tweet from Musk, Tesla could pay off the entire loan today, nine years early. Musk tweeted:

Given govt loan repayment this week (prob Wed), Supercharger update will be next week. Work continuing independent of announcement.

In order to pay off the loan, Tesla is holding an equity and debt offering, and could raise a billion dollars (boosted from the initial $830 million) from selling shares and convertible senior notes. Musk says he’ll buy $100 million worth of common stock in the offering.

If Tesla pays back the entire loan today — or sometime soon — it will be a remarkable feat. Tesla raised a $465 million loan from the Department of Energy’s controversial Advanced Technology Vehicle Manufacturing program back in the Summer of 2009. The funds helped the company build its factory in Fremont and transition from a small scale manufacturer of its first-gen Roadster electric sports car into a larger scale manufacturer of its Model S electric sedan.

Tesla was one of only five companies to receive the loans, and one of three startups. Two of the other startups that raised funds from that program, Fisker Automotive and The Vehicle Group, are struggling. Fisker, which makes the electric hybrid sports car the Karma, is near bankruptcy and The Vehicle Production Group, which makes a natural gas-powered van for disabled passengers, has shut down.

Tesla can also afford to pay off the loan early because it’s just come off of its first profitable quarter in the company’s 10-year history. Tesla also generated a record amount of revenue ($561.8 million) in the quarter, and raised its annual guidance of the amount of cars shipped by 1,000 to 21,000 this year.

Tesla stock has been on a tear this month, and is was trading at $89.24 this morning.

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Tesla’s shares rose at one point almost 30 percent in after hour trading to over $70 per share. Earlier this week Tesla’s shares had hit an all-time high of over $60 per share.

When Tesla held its IPO and started trading back in the summer of 2010, it went public at $17 per share. It’s $70-per-share milestone in after hours trading is more than four times that initial IPO price.

Tesla and CEO Elon Musk have ambitions far higher than this current marketcap and stock price. Musk has a payout package that allocates shares when Tesla’s marketcap adds $4 billion up until it reaches $43.2 billion, along with accompanying operating milestones.

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For the quarter, Tesla generated $11.25 million in income, compared to a net loss of $89.87 million for the year for the first quarter of 2012. On a non-GAAP basis Tesla said net income for the quarter was $15.42 million.

Ten-year-old Tesla also set a revenue record for the quarter, which isn’t surprising given this was the first quarter where it had a full three months of full-scale Model S production. Tesla generated $561.8 million in revenue for the quarter, compared with revenue of just $30.17 million for the first quarter of 2012.

There’s been a lot of talk about how much of Tesla’s revenue and profit for this quarter would come from the sales of zero emission vehicle (ZEV) credits to automakers. The LA Times reported that Tesla can make $35,000 per Model S car sold in ZEV credits, which could generate up to $250 million for Tesla this year.

Tesla addressed that point in its shareholder letter and said that Tesla generated $68 million from ZEV credits for the quarter, or 12 percent of revenues. If Tesla generated that amount for each quarter it could bring in $272 million from ZEV credits for the year. However, Tesla said that it expects its use of ZEV credits to decline because the ZEV credits only apply to a sixth of international sales, compared to half of U.S. sales.

Tesla is so confident of its manufacturing capabilities this quarter that it raised its guidance for the year by 1,000 cars. Tesla now says it expects to ship 21,000 Model S cars, instead of 20,000. Tesla says it is receiving orders of over 20,000 cars per year.

Tesla’s margins are also improving significantly, and the company has a target of 25 percent gross margin by the end of 2013. This quarter Tesla delivered 17 percent gross margin, up from 8 percent in the last quarter of 2012. That 25 percent margin is without ZEV credit, Tesla noted.

Tesla shares jumped almost 30 percent in after hours trading on Wednesday to over $70 per share.

Tesla CEO Elon Musk said in the call with analyst and media:

• On ZEV credits: Musk said he expects a decline of ZEV credits in Q2, and Q3 and potentially no ZEV credits in Q4.
• Tesla plans to spend $200 million in capital expenses in 2013, and that includes things like Model S factory tooling, new product development, and building out the Super Charger Network.
• Musk said Tesla has no plans right now to raise more funding.
• Tesla has a seen a meaningful improvement on demand because of the financing product.
• 10,000 Model S sales are expected from Europe, 5,000 are expected in Asia. “China is a wild card,” said Musk. Up until the second quarter of 2013, all of Model S sales have been in the U.S.
• Tesla’s top focus this year is on improving the efficiency of production of the Model S.

Updated at 3:10PM PST, with information from Tesla’s call and the stock price.

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According to documents prepared for Tesla’s upcoming annual meeting, Musk has an equity and stock grant package — called “2012 CEO Grant” — which was granted last summer, and which would deliver him another 5 percent of Tesla’s total shares if Tesla meets certain milestones and certain marketcaps. Musk is already a fabulously wealthy person, but it’s the operational company milestones, and accompanying soaring marketcap, which underscore Tesla’s ambitions.

The first tranche of the grant becomes available if Tesla’s marketcap hits $7.2 billion, and one of its operational goals is met. The remaining parts of the grant become available for every $4 billion added to the marketcap, along with an additional operational milestone, until the market cap reaches $43.2 billion and all ten of the operational milestones are met (see the milestones below).

As of April, when the documents were filed for the annual meeting, none of the milestones had yet been met, and Ford and GM had marketcaps of $53 billion and $40 billion respectively. For comparison’s sake, Apple — which Tesla has often times been compared to in its approach, brand and leader — has a marketcap of $430.52 billion.

• Successful completion of the Model X Engineering Prototype (Alpha)
• Successful completion of the Model X Vehicle Prototype (Beta)
• Completion of the first Model X Production Vehicle
• Successful completion of the Gen III Engineering Prototype (Alpha)
• Successful completion of the Gen III Vehicle Prototype (Beta)
• Completion of the first Gen III Production Vehicle
• Gross margin of 30 percent or more for four consecutive quarters
• Aggregate vehicle production of 100,000 vehicles
• Aggregate vehicle production of 200,000 vehicles
• Aggregate vehicle production of 300,000 vehicles

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While Coda settled a couple of those billing disputes from earlier this year, two of those companies that settled have filed new lawsuits stating that Coda didn’t begin paying the agreed upon settlement fee. Auto supplier CDH Detroit said that in a settlement agreement with Coda in early March, Coda agreed to start paying CDH Detroit monthly installments of $28,186 for almost a year, resulting in a total bill of $338,234. In the new suit filed April 26, CDH Detroit said that Coda allegedly missed that first monthly payment (embedded below).

Car engineering and development company RLE International (as well as an affiliate contract work company RTECH) said that Coda also settled with them and agreed to pay them $50K a month for a year and a half, but didn’t start paying the first monthly bill. The suit, dated April 25, alleged that Coda owes them $850,029.15 in total (embedded below).

In addition, events company Exhibit Works filed a suit on March 19, alleging that Coda owes them $242,265.27 (embedded below). A company called BET Services has filed a suit on April 24 alleging that Coda owes them $454,228 plus interest (embedded below). A billing and accounts receivables company called Corporate Billing filed a suit back on January 16, alleging Coda owes them $248,800 for an unpaid bill for auto parts (embedded below). And there’s at least two other pending suits in Los Angeles County Court.

Finally, former Coda employee Tony Bulchak just filed a class action lawsuit against Coda on Monday. Since the case is so new, the online complaint isn’t available yet, but I’ll update this when it is. I would assume the class action is over the layoffs, but I’ll confirm that when the documents are online.

Like how Fisker Automotive is now unraveling, Coda Automotive seems to be coming apart at the seams as well. Media reports are starting to sound its death toll, too. How much longer til Coda files for bankruptcy?

CDH vs Coda

RLE/RTECH vs Coda

Exhibit Works vs Coda

BET vs Coda

Corporate Billing vs Coda

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It’s scripted to the extent that the Oversight and Government Reform Committee already sent me a quote that’s supposed to sum up the hearing before it occurs. Committee Chairman Jim Jordan, R-Ohio, said:

It is hard to understand why the Department of Energy ever thought Fisker was a viable company that should receive taxpayer money. The Obama Administration owes the American taxpayer an explanation as to why this bad loan was made in the first place, and what they are going to do to minimize the loss that taxpayers face.

Well, I do agree with that statement, even if I don’t agree with the need to conduct a long hunt for some political cronysism between Fisker and the DOE over the loan. As I said in my piece on Fisker published last week (A Look Under the Hood: Why Electric Car Startup Fisker Crashed and Burned), I think the search for political cronyism is actually distracting from the disturbing financial story of Fisker’s now defunct broker Advanced Equities, which worked with Fisker’s VCs to raise over $1 billion without much value to show at the end of the company.

Reading through Henrik Fisker’s prepared testimony this morning, it’s also interesting to see his perspective on Fisker now that he’s not working with the company any more. He mentions numerous times in his testimonial that the company sold 2,000 Fisker Karmas that “perform well and customers love them,” and are “operating smoothly and continue to receive fantastic customer reviews.”

That’s not necessarily true. Fisker customers have been coming out of the woodwork and complaining about problems with the cars, and how they’re having trouble dealing with these problems now that the company is in financial dire straits. In March, Karma customer Kelly Stewart actually filed a lawsuit against Fisker and a dealership in Greenbelt, Maryland called Capital Cadillac Company claiming that the car was not performing as expected (the complaint and an exhibit letter embedded below).

Ms. Stewart bought a Karma in March 2012, and three weeks later she said she had electrical, battery, alignment, and heating and cooling problems. In the letter (Exihibit B) from the Maryland dealership to Fisker the dealership exec wrote:

It [the Karma] has been out of service for 87 days even though it is less than 9 months old and has less than 8,000 miles on it. To date the dealer has been unable to correct the problems and it is out understanding that these problems are systemic with these cars.

Problems with the Karma cars have also been documented by Consumer Reports’ second review (the one it did again after the first Karma car it bought almost immediately died), and Consumer Report’s review gave the Karma a failing grade.

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