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Tesla delivers mixed results with 4Q and full 2014 report

In its Q4 and full 2014 release on Wednesday, Tesla Motors reported mixed results. The company built 11,627 vehicles in Q4, achieving its production target of 35,000 Model S vehicles in 2014. However, deliveries slipped by about 1,400 vehicles due to a variety of factors.

In 2014, about 55% of new Model S vehicles were delivered into North America. While North American Model S orders grew year-on-year, deliveries were about flat as vehicles flowed into Asia/Pacific (APAC) markets to support the first year of deliveries there. The APAC region represented about 15% of Tesla deliveries for the year, and the remaining 30% of deliveries were to Europe, where delivery volume more than doubled from a year ago.

Tesla reported a GAAP loss of $108 million for Q4 2015, compared to a $16-million GAAP loss in Q4 2013; GAAP losses for the full year hit $294 million, up from $74 million in 2013. Total GAAP revenues in Q4 were $957 million, up from $615 million in Q4 2013, while full year GAAP revenue hit $3.2 billion, up from $2 billion in 2013.

Non-GAAP revenue was $1.1 billion for the quarter, up 44% from a year ago, while GAAP revenue was $957 million. Automotive revenue for Q4 includes $42 million of powertrain sales primarily to Daimler. It also includes $86 million of total regulatory credit revenue, of which $66 million came from the sale of ZEV credits.

Tesla said that it expects to deliver about 55,000 combined Model S and X vehicles, representing more than a 70% increase over 2014 deliveries, with Model X deliveries projected to begin in Q3. About 40% of these deliveries are planned for the first half of the year. Tesla entered 2015 with more than 10,000 orders for Model S and almost 20,000 reservations for Model X.

First quarter production is expected to be about 10,000 vehicles. Tesla plans to deliver approximately 9,500 vehicles worldwide in Q1, an increase of more than 47% from Q1 last year.

Tesla 2015 capital spending and operating expenses will increase, but at a more moderate pace than last year. Tesla expects capital expenditures to be about $1.5 billion as it expands production capacity, completes Model X development, and invests in the Gigafactory, stores and service centers. It also plans to grow its proprietary Supercharger network by more than 50% this year as well as continue other product development programs, including Model 3.

Tesla expects operating expenses to grow roughly 12% to 15% sequentially in Q1, driven mainly by increased engineering and design efforts. Growth of sales, general and administrative expenses in Q1 will be more modest. Tesla expects 2015 operating expenses to grow 45% to 50% annually, as compared to doubling in 2014. Overall, it expects to achieve a significantly higher level of non-GAAP profitability this year than in 2014.

Tesla stock dropped 3.9% in after hours trading to $204.50 on the release.


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In Tesla's letter to shareholders see link below you can also read that Tesla expects to reach a weekly production capacity of 2000 Model S and X by the end of 2015 up from 1000 at the start of 2015 so my guess is that Tesla's goal of 55,000 Model S and X for 2015 is a conservative estimate.

You can also read that Tesla's Giga factory will complete building construction and start equipment installation late this year and begin battery pack production sometime in 2016. This is fast. I did not expect to see any products made at that factory until 2018.

I still think the falcon doors on Model X was an unnecessary risk to take and that Tesla is likely to lose money on warranties repairing these doors when they break before the warranty expires. Tesla should also develop and sell a Model X without these doors in my opinion. That Model X will cost less and sell better because you do not get a wet car in bad weather when you open the back door.



I don't understand why the fear mongers have backed off. This is a Tesla story, where are the fear mongers? Tesla stock was down 8%, isn't the sky falling?


Terrible results and an even more terrible CC.

Overnight after this call, consensus estimates for 2015 dropped across the board for all quarters and FY'15. Q1 went from 0.40 to (0.14), with the complete year going from a possible GAAP profit to another likely loss.

Musk clearly projects further growth in cash burn (which was ($455M) in Q4), and as such has projected that the $1.9B cash-on-hand will be all gone before the year is out. So when he and Ahuja say no, we’re not thinking about another raise they are doing so with fingers crossed. Shorts have learned the hard way that Musk can find ways to raise money, so they aren’t going bankrupt any time soon, and even the biggest skeptics should know this. But with no profit in sight and the projected $40M in FCF by Q4 an obvious impossibility --- based on the guidance given right there in the CC, for God’s sake --- the borrowing will not be as cheap nor easy as it has been with junk ratings and a weaker share price outlook.

The deliveries projected for Q1 should have given everyone pause. The 2-week shorter quarter should still permit 10,000 cars to be built, and with 1400 undelivered from ’14, why only 9500 deliveries? Again, is it because operational execution at Tesla is so poor (the metrics definitely hint this is the case)? Is it because they are making deliveries based on geographic margin opportunities and are delaying shipments to weak currency locations (hope is a bad strategy, BTW)? Or is it because the mysterious and opaque demand is not what it seems? Or all the above (my vote)…

Tesla isn’t going to disappear in 2015. Anyone telling that story is a fool. The markets have come to understand that Musk can find money for quite awhile yet. But valuation is getting curiouser and curiouser and the cost of Being Elon (in the form of financing) is going up, all while a strong dollar, weak oil, thinner EV demand and growing consumer options for electrification tarnish the shiny object.

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Tesla did not specify exactly what these shipping issues where. My guess is that when Tesla announced the Model S with autopilot and dual drive a lot a Tesla customers (possibly over 1000) canceled orders that was not yet delivered (there is a lead time of 2 to 4 month between placing an order and receiving it) and instead ordered the new version of Model S and perhaps paid Tesla something for the trouble. So Tesla may have some older version Model S that need to be sold when orders come in for those. Tesla did say they had unexpectedly high demand for the P85D and the new option with higher quality seats and the newest one with executive back seats. That means they need a little more time (a few months) adjusting their production capacity for these options.

With a backblock of 10,000 Model S orders and 20,000 Model X reservations this is not the time for shareholder panic. Tesla said they are still supply restrained. That is the only "problem" they have.

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