Tesla posts sales decline in first quarter of 2014

After several years of fairly rapid growth, Tesla’s sales show signs of slowing – at least for the moment.

Figures released show that the electric car maker delivered 6,457 Model S cars, and built 7,535 during the first quarter of the year, a slight decrease from the company’s record setting fourth quarter of last year.

Tesla lovers shouldn’t worry too much about the decline in sales; orders in the U.S. are still rising, just not at the meteoric pace that have characterized the last 18 months. And sales this quarter were on track with the company’s projections.

What’s more, the increased production figures reflect Tesla’s preparation to enter new markets in Europe, and – more importantly – China.

Tesla has been actively pursuing the Chinese market for some time now, and two weeks after sales have begun, it appears local interest in the car has been high. As is the case with many things in China, government support will be crucial to success.

But given the massive smog problems facing many Chinese cities, both local and national Chinese officials seem to be taking an interest in the car. In fact in its message to shareholders Tesla reported that Model S buyers will be able to forgo the license plate auction that normally runs new car buyers upwards of $10,000.

Tesla expects the Chinese market to be so significant, that they anticipate manufacturing cars locally within five years. This plan hinges on the expectation that Tesla’s current Freemont facility will soon be running at capacity.

All of this news is more or less good, and at the moment Tesla’s future remains bright. However, it should be noted that despite generating more than $700 million in revenue from sales this quarter, Tesla has yet to make a profit. This may only be a matter of time, but for everyone with a financial or personal investment in Tesla, let’s hope a profit comes sooner rather than later.

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