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.