Tesla Motors reported total GAAP revenue of $937 million in Q3 2015, up 10% from the prior year. Total Q3 non-GAAP revenue was $1.24 billion for the quarter, up nearly 33% from a year ago. Losses for the quarter widened to $230 million, an increase over the $75-million loss in Q3 2014.
Tesla delivered 11,603 vehicles in Q3, slightly above its earlier guidance. GAAP automotive revenue in Q3 was $853 million, up 6.7%. For its non-GAAP accounting, Tesla recorded a net increase of $307 million in deferred revenue as a result of lease accounting, bringing the figure the company calculates as its non-GAAP automotive revenue to $1.16 billion.
Leasing was more popular in North America during Q3, but the percentage of Tesla direct leasing declined as its leasing partner absorbed more than the sequential increase in leases. Tesla directly leased 494 cars to customers in Q3, worth $45 million of aggregate transaction value.
Highlights of the report include:
In Q3, global Model S orders increased by more than 50% from a year ago, and grew at a faster pace in North America, Europe and Asia, than during Q2.
Tesla exceeded its production plan by producing 13,091 vehicles, including the first Model X vehicles, despite a one-week shut down to expand manufacturing capacity.
Research and development expenses declined from Q2 levels to $179 million to as Model X development work diminished during the quarter. R&D spending remained above Q3 2014.
In Q4, Tesla plans to build 15,000 to 17,000 vehicles, and to deliver 17,000 to 19,000 vehicles, which will result in 50,000 to 52,000 total deliveries for the year.
Model S production and deliveries are on track to achieve our initial Q4 plan. The primary limiting factor to higher Q4 deliveries is the near term ramp of Model X production, with the biggest constraint being the supply of components related to the second row monopost seats.
Tesla expects that Model X will achieve steady state production capacity during Q1, and held to its forecast of average production and deliveries of 1,600 to 1,800 vehicles per week for Model S and Model X combined during 2016.
Tesla expects the average vehicle sales price to increase slightly in Q4 with more deliveries of highly optioned Model X vehicles. It also expects Q4 Model S gross margin to improve sequentially, but initial Model X launch expenses and higher overhead and depreciation allocations will temporarily elevate total production costs in Q4.
Tesla forecasts a decline in non-GAAP Automotive gross margin from Q3. After Model X production stabilizes in Q1 2016, it expects Model X gross margin to improve rapidly and become comparable to Model S gross margin over the next several quarters, even given the launch of a lower priced version of Model X with a smaller battery pack during 2016.
Tesla plans to invest about $500 million in Q4, which will bring the projected total capital expenditures for this year to about $1.7 billion. The increase in spending is primarily due to accelerated investments in the Gigafactory, further vertical integration of seat assembly and other manufacturing activities, as well as faster milestone execution by certain suppliers for Model X manufacturing equipment and tooling.
Tesla customers logged almost 250 million miles in Q3, for a total of nearly 1.5 billion miles to date.
Gigafactory. Tesla began production of Tesla Energy products in Q3 at the Fremont plant. Faced with growing demand for Powerpacks and Powerwalls, the company accelerated plans to expand manufacturing capacity. In early Q4, it relocated production from Fremont to an automated assembly line at the Gigafactory. The Gigafactory pull-ahead will push some Tesla Energy Q4 production and deliveries into Q1.
Tesla said it was seeing very strong demand for Tesla Energy products globally, and particularly in Australia, Germany and South Africa. The company has accelerated plans to begin cell production for Tesla Energy products at the Gigafactory by the end of 2016, several quarters ahead of initial plan.
Tesla recently signed two conditional purchase orders for lithium hydroxide in order to promote sourcing of this commodity at lower cost and with reduced environmental impact. It plans on establishing further supplier arrangements with the intent of having a robust, flexible and cost effective supply chain in place.
New CFO and sales chief. Tesla also announced that Jason Wheeler will be Tesla’s next Chief Financial Officer and that Jon McNeill has joined as President of Global Sales and Service.
Wheeler joins Tesla after 13 years at Google Inc. where he was Vice President of Finance and led Google’s global finance function. Wheeler will replace Deepak Ahuja, who announced his intention to retire from Tesla earlier this year.
Jon McNeill is the former CEO of Enservio. Before Enservio, Jon co-founded Sterling Collision Centers. At Sterling, Jon’s team reduced industry repair times by 90% (from 18 days to less than 2 days) while simultaneously growing the business at more than 40% per year.