Tesla Beats Guidance, Overcoming the Recall That Wasn’t

Tesla Model S

Shares of Tesla Motors are surging over 11 percent on Tuesday, making for a busy news day for the electric vehicle maker. The news was arguably mixed, if not somewhat confusing at points — but a resounding piece of information was crystal clear: Tesla’s fourth-quarter sales weighed in at 6,900 units of the Model S sedan after the company had guided for slightly under 6,000.

That figure represents “about 20 percent above our previous guidance,” according to Jerome Guillen, Tesla’s head of global sales, who spoke at the North American International Auto Show in Detroit. He added that there are now more than 25,000 units of the Model S on the road today, when those sold in Europe are taken into account. This implies that Tesla sold at least 22,450 Model S vehicles last year. Impressively, it did so without having to lower the price of its car, as the majority of the electric vehicle industry saw widespread slashes to the MSRPs to help spur demand.

“With 6,900 deliveries in the quarter it’s still a niche vehicle, though you could say they are legitimately established in the marketplace,” said Kevin Tynan, who is an auto analyst for Bloomberg Industries. “You are now looking at enough volume in the market domestically that hybrids and plug-ins, or a combination of the two, are now a legitimate technology option for other carmakers as well.”

The good sales news was served alongside an announcement that Tesla would be issuing a recall-type program over concerns that its charging adapters may present a potential fire hazard. However, investors are shaking off the dreaded “R” and “F” words, as Tesla articulated that it would not be bringing any units in — instead, Tesla is administering an “over the air” update, so users don’t have to visit their regional Tesla shops. The company’s CEO, Elon Musk, also weighed in — through Twitter, of course — on the terminology used to describe the actions that the company was taken.

The adapter that Musk mentioned was redesigned to lower the potential for causing a fire, and was equipped with a thermal fuse to ensure it wouldn’t overload its capacity. “In addition, above and beyond the software update, which fully addresses the issue, Tesla is providing an additional layer of assurance by engineering a new NEMA 14-50 adapter plug that includes an internal thermal fuse,” the company said. The chargers will be mailed to Tesla’s existing customers.