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Tesla reports largest quarterly loss, maintains Musk’s Model 3 revised production targets

In Q4 2017, Tesla posted its largest quarterly loss yet, even while combined Model S and Model X deliveries in Q4 grew 10% globally compared to the prior record in Q3 and 28% compared to Q4 2016. In Q4, Tesla delivered 28,425 Model S and Model X vehicles and 1,542 Model 3 vehicles, totaling 29,967 deliveries.

Telsa reported a GAAP Q4 2017 net loss of $675.35 million, with a full-year loss of $1.961 billion.

Automotive revenue in Q4 increased by 36% over Q4 2016, mainly due to 35% growth in vehicle deliveries. For 2017, automotive revenue was up 52% from 2016. ZEV credit sales in Q4 were $179 million as compared to $20 million in Q4 2016.

Tesla said that production of Model S and Model X during Q4 was limited to 22,137 vehicles due to reallocation of some of the manufacturing resources to Model 3 production.

Approximately 23% of Q4 deliveries were subject to lease accounting, which was slightly higher than in Q3.

Model 3. Tesla said that it continues to target weekly Model 3 production rates of 2,500 by the end of Q1 and 5,000 by the end of Q2.

It is important to note that while these are the levels we are focused on hitting and we have plans in place to achieve them, our prior experience on the Model 3 ramp has demonstrated the difficulty of accurately forecasting specific production rates at specific points in time. What we can say with confidence is that we are taking many actions to systematically address bottlenecks and add capacity in places like the battery module line where we have experienced constraints, and these actions should result in our production rate significantly increasing during the rest of Q1 and through Q2.

—Tesla Q4 2017 Investor Letter

Tesla said that it intends to start adding enough capacity to get to a 10,000-unit weekly rate for Model 3 once it hits the 5,000 per week milestone.

Despite the production delays, Model 3 net reservations remained stable in Q4.

2018. Tesla said that it expects Model S and Model X deliveries to be approximately 100,000 in total for 2018, constrained by the supply of cells with the old 18650 form factor. As our sales network continues to expand to new markets in 2018, we believe orders should continue to grow. Capital expenditures in 2018 are projected to be slightly more than 2017. The majority of the spending will be to support increases in production capacity at Gigafactory 1 and Fremont, and for building stores, service centers, and Superchargers.

Comments

HarveyD

How long can TESLA keep on losing that many $$$M before their shares and sales are adversely affected?

Is SW USA the proper place to ramp battery and BEV production to increase profit margins?

Would relocation of some of the battery and BEV manufacturing facilities to Asia/China/SO Korea help to reduce delays and lower cost?

Floatplane

Oh, Harvey. That's the same sad tune you sung last time.

SJC

That is a legitimate concern, investors want results not promises.

msevior

Harvey, I believe most of the costs are capital purchases to buy the equipment and expertise to build automated factories. Low cost, unskilled labour is definitely not needed.

HarveyD

Very low cost ($7,300) small-mini BEVs are selling like hot cakes in China and are produced in very large quantities with low cost local labour.

Would large families be better off with (many, up to 4+ in the same garage space) such small-mini e-cars instead of one TESLA Model S? A small-mini e-car cost a lot less to purchase, to park and operate?

However, one has to beat the neighbor with the new Hummer One size TESLA Pick-up?

HarveyD

Do larger vehicles lead people to more junk food and sweet drinks and obesity or: does obesity lead people to larger vehicles and more pollution and GHGs?

Either way, the 60+% of our overweight and 40+% obese of all ages may soon become 70+% and 50+%.

Will we soon drive 10-10-10 vehicles?

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