Tesla shares rise on higher profit and delivery forecast

Tesla chief executive Elon Musk Image copyright Getty Images
Image caption Tesla chief executive Elon Musk expects Asia to be its next big growth market

Shares in electric carmaker Tesla surged by 12% in extended US trading after it posted stronger-than-expected profits and vehicle delivery forecasts.

The company, led by US billionaire entrepreneur Elon Musk, earned $46m (£27m) in the fourth quarter, which was higher than analyst estimates.

Sales of its Model S rose to a record, with overall revenue hitting $761m.

It also projects deliveries of its Model S electric car sedan to rise more than 55% to 35,000 vehicles this year.

"For the year, Model S was the top-selling vehicle in North America among comparably priced cars," Mr Musk said in a letter to shareholders.

"The potential in Europe and Asia is even more significant. Towards the end of the year, we expect sales in those regions combined to be almost twice that of North America."

The company is also betting big on China, and will begin sales of the Model S to the world's second biggest economy next month.

"We plan to make substantial investments in China this year as we add new stores, service centres and a Supercharger network," Mr Musk said.

"Already, the Beijing store is our largest and most active retail location in the world."

Market value

Tesla said it expects spending to increase significantly this year as it increases production of the Model S, and develops electric charging points.

The company is also finishing development on its Model X crossover vehicle, with a prototype expected on the road by the end of the year and deliveries beginning in 2015.

However, shares of the California-based car-maker have had a bumpy ride over the last year following reports of battery fires.

There have also been concerns about the valuation of Tesla, which was founded in 2003 but already has a market valuation of nearly $25bn.

In comparison, its much larger rival General Motors has a market capitalisation of $58bn.

Tesla's Model S is one of the most expensive electric cars on the market with a starting price of $70,000.

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