Electric-car maker Tesla said it expects a first-quarter profit on both a net and adjusted basis following stronger-than-expected sales of its Model S sedan, sending its shares soaring more than 19% in early trading on Monday.
Tesla also said it was dropping plans to produce a low-end version of the Model S due to lack of demand, and will focus instead on higher-margin editions of the car.
Model S sales exceeded 4,750 units in the quarter, higher than the 4,500 Tesla had forecast, the company said on Monday.
CEO and founder Elon Musk tweeted early Monday that the company will make a separate announcement on Tuesday that “is arguably more important” than its new financial guidance.
Tesla said in January that it would be profitable in the first quarter when expenses related to non-cash options and warrants were excluded.
The automaker has focused in recent months on building and selling high-end versions of the Model S, with larger battery packs that provide more range.
The top-of-the-line Tesla Model S Performance model costs nearly $96,000. The base Model S, which Tesla is dropping, has a starting price of just over $60,000.
Tesla said only 4% of customer orders were for the base Model S, which was to be equipped with a 40 kWh battery pack. Those customers instead will receive a 60 kWh battery pack, with the output and range limited by software to 40 kWh, at no additional cost.
The carmaker went public in 2010 and has narrowed its losses as production of the Model S sedan ramped up late last year.
“There have been many car startups over the past several decades, but profitability is what makes a company real,” Musk said. “Tesla is here to stay and keep fighting the electric car revolution.”