Tesla Motors Inc (NASDAQ:TSLA) is expected to achieve gross margin and cost improvement targets ahead of expectations, believes Jefferies analyst Elaine Kwei. She is also of the opinion that the Model S is seeing a rich mix of orders, and demand for the vehicle is strong, “with European demand potentially surpassing North America.”

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These were the key takeaways from the Jefferies 2013 Global Industrial Conference, where Tesla Motors Inc (NASDAQ:TSLA) VP of Investor Relations, Jeff Evanson gave a presentation.

Tesla maintaining its uniqueness

According to analysts Tesla Motors Inc (NASDAQ:TSLA) as of now is the only electronic vehicle manufacturer with 200 miles of range, which is over two times that of competitors like Nissan Leaf and Bayerische Motoren Werke AG (FRA:BMW) (ETR:BMW) i3. The electronic car manufacturer also has an edge over others with its lower per kWh battery pack cost. Tesla has been taking insights from the first all electronic vehicles, Roadster, with a traveling range of 300 miles on a single charge. According to the report, Tesla is differs from other brands in terms of price/performance value proposition and free lifetime supercharging capability.

Gross margin and cost saving targets easily achievable

Analysts at Jefferies believe that Tesla Motors Inc (NASDAQ:TSLA) can achieve more than half of its margin growth in the third quarter. EV manufacturer guided that it will achieve 25 percent gross margin (ex-ZEV credit revenue) in the fourth quarter. In the presentation, Evanson said that the company would achieve more than half of the 12 points of gross margin growth in the third quarter.

Tesla has been focusing on reducing the battery cost, but it has stated that there is a lot of cost involved in the other car parts in the wake of low volumes compared to traditional OEMs and sees a potential to further cut the cost in standard vehicle components.

Tesla Model S, a popular brand

Model S from Tesla Motors Inc (NASDAQ:TSLA) is witnessing increased demand with an average ASP over $90k compared to the base model at $70k. High demand on the optioned vehicles was witnessed in the latest pricing changes made by Tesla to differentiate between more and less price sensitive customers.

Demand in the United States is at 20,000 units per year, according to Tesla, and Model S has acquired approximately 10 percent of the large luxury sedan market. Analysts expect the global demand to be more than 40,000 units annually by the end of next year. At present, Tesla has 41 stores and has reduced its previous 50 store target to 45 stores due to better than estimated demands. Further, demand in Europe could be more than North America due to higher fuel price and tax incentives and disincentives.

The Model S is also capturing a share of hybrid and fuel efficient models apart from luxury car sedans. And apart from sedan lovers, customers with diverse interest in cars are buying Model S.  Tech enthusiasts and environmentally-minded consumers are considering it as the best car to have.

Tesla Motors Inc (NASDAQ:TSLA) was awarded the top safety rating from NHTSA after independent crash testing in three categories including front-end crash, side crash, and rollover testing.