Tesla turns a profit — to Wall Street’s surprise

Electric vehicle company Tesla Motors seems to have turned a corner financially, announcing a $26 million operating profit in its latest earnings report.

Tesla's sales are up, as is the value of the company's stock, which has increased by 300 percent this year.

"Our financial position and balance sheet have never been stronger," Chief Executive Elon Musk said in a letter to shareholders.

Though they began mass production just two years ago, Tesla has built enough momentum recently that some industry and Wall Street analysts consider them frontrunners in the electric car market. Tesla represents a high point compared to many of its competitors, which have experienced disappointing sales.

"If you look at things in terms of the nascent electric vehicle market, Tesla is clearly clearly either the benchmark or right up there setting the benchmark alongside the Nissan Leaf, which is doing really well," said Paul Eisenstein publisher of TheDetroitBureau.com.

So far in 2013, the Leaf is the most popular electric vehicle in America having sold 11,703 units from January to July. Those sales didn't come easy however; Nissan's 18 percent price cut for the Leaf is seen as a large driving factor behind its popularity.

Tesla's sales are right behind. The company has sold 10,055 units since January, which puts them roughly on pace to reach their goal of 20,000 sales in 2013.

The competition in the electric vehicle market remains far in the rearview mirror of Tesla and Nissan. Ford's electric offering of its Focus sedan just past 1,000 sales and Honda has sold just 328 of its all-electric Fit model.

The bump in Tesla sales cannot be explained by low prices like the Leaf – the cheapest Tesla starts around $70,000. Tesla attracts customers who are not just looking to enter the electric vehicle market, they attract deeper-pocketed customers who want sleek looks and impressive specs.

Tesla has just that.

"It's quick, it's sexy, and if you pay as much as $100,000 you can get as much as a 300-mile range battery, which largely overcomes one of the biggest concerns people have about electric vehicles, which is range," Eisenstein said.

To further break down barriers between apprehensive customers and Tesla, the company has invested in stations that will charge a battery to 80 percent in about a half hour, and offers lifetime battery warranties.