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Tesla posts 79% gain in automotive revenue in Q$2016 to $1.994B, drops back into red

Tesla posted a strong increase in automotive revenue in the fourth quarter of 2016, rising 79% year-on-year to $1.994 billion. However, the company dropped back to a net loss for the quarter of $121 million. Total revenue for the full year hit $7 billion. In Q4, global net orders for Model S and X combined rose more than 49%, compared to the same period in 2015, as both vehicles continue to win over new customers.

In its quarterly update, Tesla said that the Model 3 program is on track to start limited vehicle production in July and to ramp production steadily to exceed 5,000 vehicles per week at some point in the fourth quarter and 10,000 vehicles per week at some point in 2018. To support accelerating vehicle deliveries and maintain our industry-leading customer satisfaction, Tesla will expand its retail, Supercharger, and service functions.

Tesla’s acquisitions of SolarCity and Grohmann Engineering were completed in November and in January, respectively. Grohmann Engineering is a world leader in highly-automated methods of manufacturing, and this acquisition launches Tesla Advanced Automation Germany, which will help Tesla innovate manufacturing processes to be used initially in Model 3 production.

In early February, Tesla began building Model 3 prototypes. Initial crash test results have been positive, the company said, and all Model 3-related sourcing is on plan to support the start of production in July. Installation of Model 3 manufacturing equipment is underway in Fremont and at Gigafactory 1.

Gigafactory 1 began production of battery cells for energy storage products in January; these cells have the same form-factor as the cells that will be used in Model 3. Later this year, Tesla expect to finalize locations for Gigafactories 3, 4 and possibly 5 (Gigafactory 2 is the Tesla solar plant in New York).

Tesla expects to deliver 47,000 to 50,000 Model S and Model X vehicles combined in the first half of 2017, representing vehicle delivery growth of 61% to 71% compared with the same period last year.

Tesla also expects to invest between $2 billion and $2.5 billion in capital expenditures ahead of the start of Model 3 production. It continues to focus on capital efficiency while also investing in battery cell, pack and energy storage production at Gigafactory 1.


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The most important news is that Model 3 to the surprise of many analysts actually seems on track for volume production this year (5000 per week is 20,000 Model 3 per month or more BEVs than most of the old auto industry producers can sell in a year on all of their BEVs combined). That Tesla has been making pilot production since early February of Model 3 for crash testing is a very good sign. They do it in a part of the Fremont factory called Area 51!

I also noted Tesla shipped 98Mwh of energy storage in Q4 or 98,000kwh. They made 131 million USD in revenue on that up from just 11.5 million USD a year ago. The growth is a fantastic over 1000% in one year and Tesla also got a very good price for it in terms of kwh. More precisely 1337 USD per kwh. I guess Tesla is making much money selling the associated power electronics. The growth in Q4 is impressive as they had not begun battery production at the Giga factory in Q4 and barely begun production of their much improved powerwall 2 and powerpack 2. Looking forward to follow the growth ahead in Tesla’s energy storage business segment.

More interesting news is that Tesla is expanding their car insurance business. Tesla knows better than any the risk of their cars breaking or crashing so they should do their insurance as well. This also gives them an incentive to decrease such expenses by making better cars and a better autopilot so they can offer cheaper insurance.


Will TESLA produce their Model 3 at the rate of 20,000/month by the end of 2017 and than 41,000+/month in 2018?

From past experience with other models, many have (proven) doubts about TESLA's deliveries.

Model 3 promised by mid-2017 may be around by 2018/2019 and beyond?


There have been delays in new model delivery projections for sure. That is not uncommon.We are still waiting for that heap of shite strike fighter that is how many times over budget with no end in sight?
How long has that company been around?
The Wall went from $4B to $28B to $40B in a week!
As long as 'we' aren't paying for it who cares?
A more comprehensive list of real failures would run into next year!

To be $ 1.7% short of a balanced budget doesn't sound like the complete fup some will no doubt claim.

The old saying is that good things are worth waiting for.
Another is 'We'll or "let's (wait and) see'


A hideous converence call and even uglier 8K. Looking forward to the details of the 10K and the further valuation decay resulting.

Religious adherents of the Church of Tesla actually think "pre-production cars" were crash tested for record, so there is plenty of hilarity for observers like yours truly. Musk readily admitted in the conference call that dies for body production are not even complete and installed yet, much less having validated configurations and stamping processes. "Crash testing" consists of ramming hand-built Body-in-White models to validate designs and modelling tools. Not sure Musk knows the difference, but in any case he certainly doesn't want innocent moneylenders to know. There will be no actual M3 production deliveries to Tesla showroom floors before 2018 and every sentient being in the wold knows that.

Solar City acquisition was a disaster of disasters, contributing $85M of cash and $Bs in debt for the price of printing $2.6B in TSLA shares. Total sales between heritage SCTY business and Tesla Energy Storage was $132M in Q4, $78M less than SCTY alone last qtr.

Most comical was Musk telling all the sad tale of ZEV credits (again), and his assertion that Tesla gets "50 cents on the dollar". Awesome.

Sadly the markets will raise money for another spectacular losing year for Tesla, adding to the $3B+ of retained losses on the balance sheet; there is no risk of BK anytime soon.

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Tesla needs to spend far more on capital expenditures than other industrial firms that are not growing at over 50% per year. As Musk also said during the shareholders Q&A if it was not for Tesla’s efforts to grow at over 50% per year they would be making good money currently for the shareholders because they have healthy gross margins.

I expect Tesla to issue stock once or maybe twice more to finance its continued 50% growth until the end of 2018. At that time the Tesla Network (the network that allows all Tesla cars with autopilot hardware version 2 to function as fully autonomous taxies) will go public and that will generate all the money that Tesla needs to continue to grow at over 50% and at the same time turn a profit for its shareholders. With income from the Tesla Network Tesla will no longer need to use the stock market or any other means of external financing for their expansion.

Tesla could share half of the profits made on the Tesla Network with the owners of Tesla’s cars so that people has an incentive to buy a Tesla car and make it nearly 100% available to the Tesla Network to function as a profit generating machine. A driverless Model 3 will cost about 43,000 USD (35,000+8,000) and it could drive 100,000 miles per year earning say 80 cents per mile on the Tesla network or 80,000 USD per year. This is plenty to pay for the car and its operating costs and deliver a very healthy profit. A driverless Model 3 without any human controls (steering wheel and pedals) could be made for only 39,000 USD. I think Tesla will sell a lot of those in 2019 and by 2020 sales of driverless cars without human controls (and that can be bought by people without a driver license) will make up most of Tesla’s sales.

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