Tesla Reports Fourth Quarter Financial Results

Tesla Inc. (NASDAQ: TSLA) reported its fourth quarter financial results after market close on Wednesday. The electric vehicle maker reported weaker-than-expected earnings, which sent shares 3% lower.

For the fourth quarter, Tesla reported earnings of USD 1.93 per share on revenue of USD 7.23 Billion. Refinitiv analysts expected earnings of USD 2.20 per share on revenue of USD 7.08 Billion.

Tesla highlighted that its Model 3 success carried over sequentially, driving in quarterly operating income of USD 414 Million despite decline in revenue quarter-over-quarter, higher import duties on components from a China, a price reduction, and the introduction of its cheaper Model 3.

The Company noted that the month of December was the highest volume ever for Model 3 production rates. With complications out of the way at its Fremont facility, Tesla now has the ability to achieve a production rate of 7,000 vehicles per week.

In the fourth quarter, Tesla delivered 63,359 Model 3 vehicles to customers in North America. In January 2019, Tesla began to produce Model 3 vehicles for Europe and China and is also certified for sale in those markets.

Model S and Model X deliveries totaled 27,607 for the quarter. As for the full year, Tesla delivered 99,475 Model S and X vehicles, which fell in line with its guidance. Tesla said it recently stopped taking orders for the 75 kWh version of the vehicles and focus on longer range ones instead.

Total automotive revenue for the quarter increased by 4% sequentially and by 134% year-over-year, driven by an increase in Model 3 deliveries.

As for 2019, Tesla expects Model 3 volume to grow substantially year-over-year due to full year of high production rates at its Fremont facility. Also, by the end of the year, Tesla is expecting to begin producing Model 3 vehicles at its Gigafactory Shanghai. Compared to the Fremont facility, Tesla expects capital spend per unit of capacity for the Shanghai facility to be less than half.

In the Shanghai facility, Tesla is aiming to produce 3,000 vehicles per week and look to achieve 10,000 per week on a sustained basis. Barring challenges associated with the Shanghai facility, Tesla is targeting annual Model 3 output in excess of 500,000 units sometime between Q4 of 2019 and Q2 2020.

Due to the Tesla’s global expansion, it expects lower deliveries in North America for Q1. Primarily, the Model 3 expansion into Europe and China is driving lower deliveries for North America.

In total for 2019, Tesla is forecasting 360,000 to 400,000 vehicle deliveries for 2019, representing a 45% to 65% increase year-over-year. The Company also expects to have positive GAAP net income and generate positive free cash flow in every quarter beyond Q1 2019.

“This year should be a truly exciting one for Tesla. Model 3 will become a global product, the profitability of our business should become sustainably positive, our new Gigafactory Shanghai should start producing cars, and we will start tooling for Model Y production. Our growth opportunities are massive. Our accomplishments have been possible thanks to the exceptional effort of our employees and the support of our customers, suppliers and investors. We hope you’re as excited as we are about 2019.” said Tesla in its earnings transcript.

  1. Mark Hruska 7 months ago

    No puts guys, this is a straight short. .3% borrow rate and plenty of inventory at IBKR $TSLA

  2. Mike Taylor 7 months ago

    Wasn’t the insane demand caveated by the fact that people don’t have money in their bank account and can’t afford them. Tesla doesn’t have a demand problem, they have a poor people problem. $tsla

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