Tesla receives Letter of Intent from Daimler for full electric powertrain program for a Mercedes vehicle
In its letter to its shareholders reporting Q3 performance, Tesla Motors said that it had received a letter of intent from Daimler for a full powertrain program for a vehicle in the Mercedes line. Details of this deal remain confidential, Tesla said, but will be announced in the coming months.
Tesla’s existing production agreements with Daimler and its development services agreement with Toyota produced combined revenue of more $29 million in the third quarter; total Q3 revenues were $58 million. Powertrain component related sales accounted for almost $15 million, a new quarterly revenue high. Tesla said that it expects to complete all deliveries under the Smart fortwo and A-Class programs on schedule by the end of this year.
Tesla said it has met all of the Toyota RAV4 EV milestones planned for the quarter, delivering development services revenue of more than $14 million for the third quarter. Overall, the RAV4 EV development program remains on schedule and should be completed by early 2012, as planned. Thereafter, Tesla plans to begin shipping complete powertrain systems for the RAV4 EV to Toyota, under a multi-year contract of approximately $100 million.
Model S and Model X. Tesla said that it remains on plan to deliver the first Model S vehicles to customers no later than July 2012. The company recently finalized a long-term supply contract with Panasonic for cells used in the Model S, giving it increased visibility into its variable costs. (Earlier post.) Tesla said that it continues to have confidence in the long-term target gross margin of 25% for Model S upon realizing the manufacturing efficiencies associated with an annualized sales run rate of 20,000 units.
Through the end of September, Tesla had gathered about 6,500 reservations for the Model S as of the end of September. These reservations require a minimum $5,000, refundable deposit.
Tesla also said that it remains on plan for an exclusive showing of the Model X—a vehicle that combines the functionality of a minivan “with a design as cool as an SUV”—later this year. Tesla is leveraging the Model S architecture and powertrain for Model X, and anticipates that Model X can be brought to production quickly for first customer deliveries in late 2013, with volumes ramping to 10,000—15,000 units per year beginning in 2014, and at prices comparable to Model S. Much of the equipment we are currently installing at the Tesla Factory for the Model S will also be used for the Model X.
Q3 results. Tesla reported total Q3 revenues of $58 million, up 85% from Q3 of last year. Automotive sales grew by almost 11% from last quarter due to solid Roadster demand and powertrain component sales. It reported a non-GAAP net loss of $0.55 per share this quarter, or $0.63 per share on a GAAP basis, reflecting continued investments in R&D and corporate infrastructure to support the launch of Model S.
Total Q3 operating expenses were $82 million on a GAAP basis and $74 million on a non-GAAP basis; almost two-thirds of its operating expenses relate to investments in research and development. Tesla says that net losses will continue until it reaches volume sales of the Model S in 2013.
Total gross margin in Q3 was 30%, down slightly from Q2 due to lower mix and margin contribution from development services revenue. Tesla now projects that full year revenues will be between $195 and $200 million, up from the prior guidance of $180 to $190 million.
Tesla has cash resources of $334 million, higher than last quarter’s balance of $331 million. During Q3, it drew down almost $91 million from it Department of Energy loan facility. Combining the $334 million of cash on hand with the additional $240 million left on the DOE loan facility, Tesla has approximately $574 million in available capital resources. The company believes that these funds will be sufficient to develop and deliver Model S and Model X, based on current plans.