Tesla's Posts A $282 Million Loss In the First Quarter

[William Maley]

Despite posting $1.1 billion in revenues for the first quarter ($1.6 billion under non generally accepted accounting principles - GAAP), Tesla reported a net loss of $282 million for the quarter. Compared to the last quarter, Tesla made less in revenue, but the loss was slightly less. Tesla credits this to a careful watching of its spending. Tesla notes that its cash on hand - $1.4 billion - "does not include any meaningful cash flow from Model 3 reservations," but a fair chunk of that reservation money was used to repay back a $430 million credit line.

 

This isn't the big news as it lines up with what analysts were expecting. It was Tesla's announcement of moving its timeline to produce 500,000 vehicles a year from 2020 to 2018.

 

“Increasing production fivefold over the next two years will be challenging and will likely require some additional capital, but this is our goal and we will be working hard to achieve it,” Musk said in a letter to shareholders.

 

This is most likely due to the strong demand for the Model 3 which at the time of this writing has 400,000 reservations.

 

Tesla also reiterated plans to produce 80 to 90,000 vehicles for 2016. In the first quarter, Tesla built 15,510 vehicles - 12,851 Model S sedans and 2,659 Model X crossovers. The latter model has been having a number of issues from windshield suffering from 'double vision' distortion to the falcon doors not closing. When asked about the quality issues during the call with analysts, Musk said he has a sleeping bag near the production line that he uses “quite frequently.” We're assuming that he is watching the production line to see if there are any issues coming up.

 

Source: Automotive News (Subscription Required), Autoblog, Tesla

 

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[El Kabong]

The madness of King Elon.

[balthazar]

12851 Model S's is 51,404 annually. Tesla sold 52,580 last year, of which around 52,375 were Model S's.

Model X was predicted to be at a 750 unit/wk production rate, but perhaps quality issues are still a major hurdle, as Model X production in the first quarter is still only about 200 units/wk. Or maybe Jan/Feb were unusually low.

 

Musk wants to sell 90,000 units this year but is only on pace to build 62,000.

 

Would really like to know what kinds expansions are going on behind the scene to make this prediction plausible.

[smk4565]

It isn't that bad of a loss, but at some point they need to get this production up.  I think buyers and the share holders are still willing to wait, but if this time next year they are losing money and struggling to fill orders, there might be some revolt.  On the flip side, if Elon can meet his 90,000 unit goal and the 500,000 by 2020 or whatever he is shooting for, they could hit it big and make money hand over fist.  It will be interesting to see how it plays out, I hope they succeed, I like the idea of more wide spread electric cars (good electric cars, not crap like the Leaf).

[balthazar]

2015 :: 52,580

2016 :: (on pace for) 62,000

2017 :: ?

2018 :: 500,000 

[El Kabong]

Sergio Marchionne would get pillored for making such sales predictions. But at least FCA turned a profit last quarter.

[Suaviloquent]

Well the problem I see with what math you use Balth for the "on pace" determination is that it isn't forward looking, because you're not accounting for the growth rate. What I mean is the factor by which the production rates grow.

 

Two years ago Tesla delivered 25,000 vehicles. The next one, 50,000. This one, perhaps 80,000 to 90,000.

 

From there...I think it's pretty clear they're gonna need a fairly sizable infusion of cash from somewhere. Probably an equity offering.

 

Hey, all the Tesla patents are out there. It's not like Sergio doesn't have the means to actually follow through copying Tesla and making a Model 3 much sooner. That alone would be far smarter than investing in anything Fiat.

[balthazar]

It's straightforward; the 'math' is based on the just-released Q1 number from Tesla. 

They may indeed hit 80-90K this year, we'll see. 90K is obviously almost doubled from '15.

The growth rate is very incremental. With 2016 25% in the books, they are actually down on Model S sales.

 

Double sales again in '17 and Tesla could see 175K.

But doubling it again in '18 is 'only' 350K, or a far cry from "500K".

It's really a towering claim ("500K by 2018"). 

[Suaviloquent]

Yeah, but it's not adjusted for the growth rate.

 

You don't base production numbers from one quarter. It gives you a distorted number for a company still expanding its production capabilities.

 

Otherwise, what, based on Q1 2014, you'd expect them to continue to build only 25,000 cars in 2015?

 

If you don't account for the growth rate, basically the exponential factor, it is NOT straightforward, because you get really a meaningless number.

 

 

And where did I say 500k was easily possible? Of course it's gonna be hard. But they can do it, if they get the cash infusion needed to do so.

[balthazar]

Ahh, I get what you're saying now.

You are correct; of course Q1 does not necessarily indicate 2016's total sales, but that's why I said 'on pace for'...

 

...because I'm not aware there's much of a 'growth rate' going on. Model S is down slightly, and Model X may have just gotten to stated production goals, when it was supposed to be that out of the gate in Sept. The established pattern @ Tesla, and likewise; my point- is that the timetables & totals are always behind stated goals. I was boggled when  Musk moved that goal up BY TWO YEARS recently.

 

I'll go out on a limb here and say there's NO WAY Tesla reaches even 375,000 units (75% of the stated 500K) by the end of 2018.

Edited May 7, 2016 by balthazar

[David]

I believe Tesla will hit 250K units by 2018 only half of his prediction and I think late 2018 to early 2019 for Tesla 3 models to be delivered.

 

I also will state that GM Chevy BOLT will eat MANY of the Pre Orders once it is out and people can drive it.

[Suaviloquent]

That's good. Elon Musk- many people think he has a big ego - he does. But he wants other Electric cars to suceed in as so much as even supplanting Tesla, and making sure the industry changes, and moves even further forward.

 

Yeah, electric is mired in own problems, like the carbon emissions of building batteries....but at this point we all know making any car is filthy and polluting.

[balthazar]

12851 Model S's is 51,404 annually. Tesla sold 52,580 last year, of which around 52,375 were Model S's.

Q2 numbers are out.

Q1 Model S sales : 12,851.

Q2 Model S sales : 12,420.

 

Q1 Model X : 204

Q2 Model X : 2400.

 

That's a to-date half-year sales total of 27,875.

 

Musk wants to sell 90,000 units this year but is only on pace to build 62,000.

 

Adjusted sales pace for 2016 : 55,750.

 

Musk stated he wanted to sell 90,000 in 2016.

 

Not seeing the exponential 'sales growth' so far.

[David]

 

12851 Model S's is 51,404 annually. Tesla sold 52,580 last year, of which around 52,375 were Model S's.

Q2 numbers are out.

Q1 Model S sales : 12,851.

Q2 Model S sales : 12,420.

 

Q1 Model X : 204

Q2 Model X : 2400.

 

That's a to-date half-year sales total of 27,875.

 

 

 

Musk wants to sell 90,000 units this year but is only on pace to build 62,000.

 

Adjusted sales pace for 2016 : 55,750.

 

Musk stated he wanted to sell 90,000 in 2016.

 

Not seeing the exponential 'sales growth' so far.

 

Nope EV is for long term thinkers and long term owners of auto's, with cheap gas many people who only see an auto as a 2-3 year ownership before trading it in on the newest thing is going to hurt EV sales.

[surreal1272]

Sergio Marchionne would get pillored for making such sales predictions. But at least FCA turned a profit last quarter.

Real easy to turn a profit when you get to rely on Jeep and RAM to make up for the rest of your $h!ty Italian product. If only Musk had that to fall on.

Edited July 11, 2016 by surreal1272