For the third quarter, Tesla Motors Inc (NASDAQ:TSLA) revenue and Non-GAAP EPS were above the consensus estimate, and the company looks well on track to meet its 2013 delivery and gross margin targets. The automaker is developing its supercharger network, and expanding in regions like the EU and Asia. Baird analysts Ben Kallo and Tyler Frank believe “execution on these fronts is currently priced into the stock and the company remains fairly valued.”

Tesla Motors

3Q numbers for Tesla

Tesla Motors Inc (NASDAQ:TSLA) posted third quarter revenue of $602.6 million compared to Baird analysts’ estimate of $547.9 million and the consensus estimate of $547.5 million. Non-GAAP net income for the company came in at $15.9 million and non-GAAP EPS was posted at $0.12 compared to analysts’ estimate of $5.4 million and $0.04, and the consensus estimate of $11.8 million and $0.08 respectively.

Batteries biggest constraint

According to management at Tesla Motors Inc (NASDAQ:TSLA), its current challenge is battery cell production, which analysts believe can be sorted out once Tesla starts building in-house batteries and launches a new high-powered cell for its upcoming Gen III vehicles. Tesla has signed an agreement with Panasonic for the supply of 2 billion lithium ion batteries. Capital expenditure in this regard has not yet been announced by Tesla.

Deliveries, gross margin target achievable

For the last quarter Tesla delivered 5,500 vehicles, including 1,000 vehicles to Europe, which was in line with the analysts’ expectations of 5,400, but missed consensus expectation of 6000+ vehicles. Also, the automaker is now manufacturing 550 vehicles per week, and will start delivering in China in the first quarter of 2014. For now, the main concern amongst Chinese consumers is that they have to wait for 5-7 months.

In the first quarter of 2013, the total number of Model S cars delivered was 4,900, and in the second quarter the number was 5,150. Furthermore, in the third quarter total Model S delivered by Tesla Motors Inc (NASDAQ:TSLA) was 5,500.

Looking ahead, the company is expecting total deliveries of 21,500 Model S vehicles in fiscal year 2013, and gross margins to touch 25%+ by the fourth quarter. Analysts hold the view that Tesla might get a boost in its gross margin as it receives supplier break points.

At present, Tesla Motors Inc (NASDAQ:TSLA) is operating over 100 retail and service stations. Adding to that the company is also running 31 superchargers stations in North America, and a major European expansion is expected in 2014.