Earnings Reports

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Electric transport and storage company Tesla reported another huge loss with Q4 earnings Wednesday but points to “a transformative year” ahead. $TSLA says they are “on the cusp of a step change in the world’s transition to sustainability.” Production promises have been dialed back after more misses.

Tesla Musk Oops

In a manic stock market bigger losses are overlooked with hopes but the question has to be asked how many broken promises and cash burned can a market bare?

Earnings

Reported a net loss of $3.04 per share on $3.29 billion in revenue, ahead of consensus estimates from Thomson Reuters of a net loss of $3.12 per share on revenue of $3.28 billion. The same period of last year reportedly had a $0.69 per share net loss and $2.28 billion in revenue.

Tesla Inc NASDAQ: $TSLA

Premarket $343.50 ▼ 1.27 (0.37%)

Highlights

  • 2018 will be “a transformative year”
  • Tesla is “on the cusp of a step change in the world’s transition to sustainability.”
  • Tesla deployed 143 megawatt hours (Mwh) of energy storage products, growing 45% from the fourth quarter of 2016.
  • Deployed 129 MWh of energy storage in South Australia which will be recognized in the first quarter based on commercial transfer of the site to the customer.
  • Automotive revenue increased by 36% year over year with 35% growth in vehicle deliveries. For the 2017 full year, automotive revenue was up 52%.
  • Service and other revenue fell by 5% sequentially but increased by 81% year over year.

While it is true that Tesla is not a one trick pony anymore since it acquired another Musk stablemate in Solar City it is the electric car that all the hype, promises and branding is built around.

Auto Production Targets, Orders and Deliveries

  • Tesla delivered 28,425 Model S and Model X vehicles and 1,542 Model 3 vehicles, totaling 29,967. 
  • Combined Model S and Model X net orders in the quarter just under the Q3 all-time high.
  • Combined orders for Model S and Model X grew significantly in 2017 compared to 2016.

Tesla has persistantly pushed back production targets and had been expecting to reach production of 5,000 Model 3 vehicles per week by late in the first quarter of 2018. Previously Musk indicated that he expected 5000 by fourth quarter of 2017. Musk has 'finally' stopped short of giving brazen targets and refers to diffuclties in production targets and bottlenecks.

Gigafactory

When fully scaled, the Gigafactory 2 is projected to be able to produce enough solar cells to add more than 150,000 new residential solar installations every year.

Solar

Tesla said“ Powerwall demand for home energy storage” at levels “consistently above production levels;” “solar MW deployed declined as volumes continue to be impacted by our decision to close certain sales channels earlier this year and to focus on projects with better margins;” with demand outpacing production.

Tesla expects the “backlog (of Solar Roof tiles) to remain in excess of one year for the next several quarters.”

Service

Tesla service capacity more than doubled in 2017 due to new locations and a 50% increase in productivity of existing service locations and expansion of a Mobile Service fleet to 230 vehicles.

In 2017, 338 new locations opened for a total of 1,128 Tesla Supercharger stations globally.

Tesla Semi

During the quarterly conference call Musk said. “The way that the chemistry works is that for short periods of time you are able to extract energy,” Musk explained, “essentially using ion migration from the outer surface.”

Tesla Self Driving

Musk said in 2017, “Our goal is, and I feel pretty good about this goal, that we’ll be able to do a demonstration drive of full autonomy all the way from LA to New York, from home in LA to let’s say dropping you off in Time Square in New York, and then having the car go park itself, by the end of next year. Without the need for a single touch, including the charger.”

Now in 2018 Tesla says it “will showcase a major leap forward for our self-driving technology” . Musk said in a changing environment requires “passive optical” rather than “active optical/ Lidar (Light Detection and Ranging)” to achieve autonomous driving goals. Tesla’s neural net is to expand as the company’s customer fleet grows, which enables more high-quality data collection and analysis than previously. Part of that overall goal will be a series of new Autopilot features in 2018 and beyond. Musk added Tesla’s upcoming shared autonomy fleet will be a little like Uber and a little like Airbnb and will be a “pretty significant opportunity.”

He went on to say “As we see people upgrading to full self-driving capability,” Musk  said level 2 autonomy will also be able to offer easy swap-out of the computer system, which will meet regulatory standards so cars can “better than humans,”

Autopilot will require upgrades, and this full self-driving capacity will cost an extra $3,000 to $5,000.

Outlook

Tesla expects to begin generating positive quarterly operating income on a sustained basis in 2018. Tesla says customers have continued to be “great partners and advocates,” patiently waiting as the production ramp continues to accelerate.

Elon Musk predicting growth in the Model S and Model X production rates:

We continue to target weekly Model 3 production rates of 2,500 by the end of Q1 and 5,000 by the end of Q2. It is important to note that while these are the levels we are focused on hitting and we have plans in place to achieve them, our prior experience on the Model 3 ramp has demonstrated the difficulty of accurately forecasting specific production rates at specific points in time. What we can say with confidence is that we are taking many actions to systematically address bottlenecks and add capacity in places like the battery module line where we have experienced constraints, and these actions should result in our production rate significantly increasing during the rest of Q1 and through Q2. - Elon Musk

The consensus estimates call for a net loss of $2.39 per share on $3.6 billion in revenue for the first quarter.

Cash Balance

The company had a cash balance of $3.4 billion entering Q1 2018.

With the stockmarket crash and the vulnerability of the NASDAQ these projections and burn rates will be more tightly scrutinised. Not many doubt Musk's vision but many doubt Tesla affordability and longevity.

Source: Tesla

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