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While Tesla reports solid earnings, its stock falls

Electric car company Tesla Motors (s TSLA) announced modest and positive third quarter earnings on Tuesday, but saw its stock fall by around 10 percent in after-hours trading as apparently the results weren’t good enough for Wall Street. The stock has long been trading sky high, and many have pointed out that it’s been over valued for quite awhile.

Tesla reported GAAP (generally accepted accounting principles) revenue for the quarter of $431 million, up 6 percent from the second quarter, and up considerably from $50 million the third quarter the year earlier. The company reported a non-GAAP income of $16 million, or 12 cents per share, and a GAAP net loss of $38 million, or loss of 32 cents per share. The $38 million net loss was larger than in Q2, but considerably smaller than its net loss in the third quarter of 2012 at $110.8 million.

We drive the new Tesla Model S Thumbnail

Tesla said it expects to ship slightly more cars than expected (6,000 cars) in the fourth quarter of 2013, bringing its total number of vehicles shipped to 21,500. Tesla now has over 19,000 Model S delivered and on the roads, and 5,500 of those were delivered in the third quarter (1,000 of that to European customers).

Positive growth margin growth is something Tesla watchers have been watching closely, and again Tesla grew its non-GAAP gross margin on its cars to 21 percent from 14 percent in the last quarter, due to making its supply chain and manufacturing more efficient. Tesla is aiming for 25 percent gross margin by the end of the year.

Finally Tesla took its first reservations for China in the third quarter, and said it plans to deliver its first model S in China in first quarter of 2014.

Overall Tesla had a fine, mostly on track quarter, while Wall Street finally began to realize that the stock might have been over valued. We’ll listen to the earnings call shortly and update this post throughout.

Live from the call:

Elon Musk said on the call that Tesla expects to get to the 25 percent gross margin on its cars in the fourth quarter without ZEV credits. He says he’s pretty confident of that.

Tesla will be done with the design work for the Model X in the next few months. Next year they’ll start styling on the third-generation car, as they’re finishing the Model X design now.

Musk says Tesla could do a soup-to-nuts type of giga-factory with partners, and that factory would likely be in North America, but it could be somewhere else. The battery cell production is the biggest constraint and the ramp up for the third-gen would be no slower than the increase of that.