More Tesla Motors coverage

PALO ALTO -- Tesla Motors (TSLA) announced Tuesday that it ramped up production and deliveries of its luxury, all-electric Model S sedan in its third quarter. But its stock got hammered on Wall Street, in part because some analysts were expecting even higher sales numbers.

In a letter to shareholders, Tesla said it is now making more than 550 cars a week at its Fremont factory and delivered 5,500 cars in the quarter, which ended Sept. 30. That was more than the 5,000 cars the company had forecast. Of those, 1,000 went to customers in Europe.

Tesla also raised its guidance for the year, saying it will deliver 21,500 cars in 2013 instead of the 21,000 originally expected.

But the number of cars sold was less than the "whisper" number on Wall Street, and Tesla shares, which closed Tuesday at $176.81, were down by more than 11 percent in after-hours trading.

"This stock has become a retail-investor darling, and my take is that retail investors were confused by headlines predicting a Q3 blowout," said analyst Andrea James of Dougherty & Co. "There were whisper numbers on unit deliveries that were too high. If this were any other stock, it would have beat expectations handily. Tesla's execution looks strong."


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Tesla reported profit in the third quarter of $16 million, or 12 cents a share, excluding certain unusual or one-time expenses, on revenue of $605 million. Wall Street expected Tesla to post 11 cents a share on $535 million in sales, according to an analysts survey by Thomson Reuters.

In a conference call with analysts, CEO Elon Musk stressed that Tesla is not suffering from a lack of demand from consumers. The biggest challenge remains the limited global supply of battery cells, he said.

"We spend our time trying to figure out how to ramp up production faster," said Musk. "We expect to alleviate a lot of production constraints next year. The critical thing is the cell production constraint."

Tesla has been focused on the Model S but is accelerating work on the Model X, a crossover between a minivan and an SUV. First deliveries of the Model X are scheduled for late 2014.

Musk said Tesla has done a "soft opening" of its first showroom in Beijing and hopes to begin deliveries in China in February.

Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.