Investor's Corner
Tesla beats Wall St. estimates: $7 billion revenue; record Model S, X orders; Model 3 production starts in July
Tesla released its fourth quarter 2016 earnings after the closing bell on Wednesday, summarized in the Q4’16 Update Letter, surprising Wall Street after posting fourth quarter earnings loss of 69 cents a share, at the low end of the estimated analyst losses. Revenue was $2.28 billion versus an estimate of $2.13 billion.
The complete text of the Tesla Fourth Quarter 2016 Update letter can be seen at the end of this article. We’ve embedded a copy of the original document from Tesla.
Revenue
In the letter, Tesla announced that “2016 revenue of $7 billion, up 73% from 2015.”
This is the first time Tesla reported earnings since the company’s acquisition of SolarCity Corp. in mid-November. Tesla had done little to guide the market for how to expect results, leading some analysts to exclude the solar panel business from their estimates until greater clarity is provided. As a result, the estimates between analysts varied widely. Some were expecting the company to report a loss of as low as $0.43 per share on revenues of $2.18 billion for the December quarter. Other analysts were expecting a loss of as much as $1.19 a share. According to a consensus poll with analysts conducted by FactSet, Tesla was expected to report an adjusted fourth-quarter loss of 53 cents per share. Expectations varied greatly.
Model 3
In the letter, Tesla announced that “Model 3 on track for initial production in July, volume production by September” and reiterated that “the Model 3 and solar roof launches are on track for the second half of the year.”
The company also reported record high orders in Q4 for its Model S and X vehicles.
Elon has set a July 1 deadline for his suppliers and internal teams to be ready for production. Investors will be listening for additional information about the status of the Model 3 during the conference call scheduled for 2:30 pm PT today.
An update on the Model 3 is highly anticipated. With Elon Musk’s goal of manufacturing and selling 100,000 to 200,000 Model 3’s in the second half of 2017, and half a million cars per year by 2018, this is a major driver for the stock. Since the company ended 2016 producing 83,922 cars, or roughly 230 cars per day, ramping up production sixfold will require new investments in equipment, people and facilities.
Guidance for 2017
In the letter, Tesla states that “We expect 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. In addition, both GAAP and non-GAAP automotive gross margin should recover in Q1 to Q3 2016 levels and then continue to expand in Q2 2017.”
Elon Musk has a history of setting ambitious targets and missing deadlines. Jeffrey Osborn, an analyst for Cowen and Co., wondered if the influence of Chief Financial Officer Jason Wheeler, after about 18 months into his job since coming from Alphabet Inc., would have been seen in setting more conservative 2017’s targets.
SolarCity
In the letter, Tesla announced that “SolarCity and Grohmann integrations underway.”
Elon Musk also faces the challenge of integrating SolarCity into Tesla. He dropped the word “Motors” from the company’s name earlier this month as he looks to make a fully integrated company that makes solar powers to generate energy, large batteries for storing that power at home and offices and electric cars that can run on it. Since the deal closed on Nov. 21, Tesla shares have risen almost 50%.
The quarter’s results include just over a month of the SolarCity merger. It may be difficult to determine how much it impacted Tesla’s numbers unless management provides specific information on SolarCity. March quarter’s guidance will be even more important than usual since it will include a full quarter of SolarCity’s business. Watch for some of these issues to be discussed in the Conference Call Q&A.
Cash
In the letter, Tesla announced that “Q3 to Q4 cash increased by over $300 million to $3.4 billion. In Q4, we increased cash by $309 million.”
One of the big issues against the SolarCity deal was the effect it would have on Tesla’s cash pile just as it prepares to introduce the Model 3. Mr. Musk has said he has enough money, though signaled he might raise additional cash through the capital or debt markets. Tesla’s guidance in October suggested it planned to spend about $1 billion on capital expenditures in the fourth quarter. Tesla finished September with $3.1 billion in cash.
TSLA Stock
Tesla shares have been on a tear, up 53%to $277.39 since December 2 when they closed at $181.47. From a technical perspective the shares had created a double bottom when combined with the low from November 14 of $181.45. The 53% increase has led to the stock being overbought but the shares have been overbought since the beginning of the year when they were trading at $214. The shares are also 18% above their 50 day moving average and 29% above the 200 day moving average. All of these are bullish indicators, closely followed by technical investors and traders.
The previous time the shares were this far above its moving averages was back in 2014. While it may only be short-term the stock is more likely to move down vs. up after today’s earnings announcement.
Today’s session ended up closing 1.4% lower, with some traders not wanting to risk the huge gains over a Quarterly report. Looking at the extended trading action after the close, the initial reaction to the numbers for Q4 2016 is hugely positive, with the stock raising to $280 just 1 minute after the close and continuing into the session. Expect a positive opening on Thursday.
[pdf-embedder url=”http://www.teslarati.com/wp-content/uploads/2017/02/TSLA_Update_Letter_2016-4Q.pdf”]
Elon Musk
Tesla Cybercabs narrowly miss deadly Amazon cargo plane crash
An Amazon cargo plane crash near Miami’s airport stopped feet from dozens of Tesla Cybercabs.
An Amazon Prime Air Boeing 767 cargo jet overran the runway at Miami International Airport on Sunday afternoon, killing five people and injuring five more. The jet, operated by North Carolina based carrier 21 Air as Flight 7598, touched down around 2 p.m. after arriving from San Juan, Puerto Rico, then crossed the airport perimeter, plowed across NW 67th Avenue and struck multiple vehicles before catching fire, according to the Associated Press.
Photos and video from the scene show the aircraft’s nose stopped within meters of a fenced staging lot holding dozens of gold painted Tesla Cybercabs, the steering wheel free robotaxi Tesla began putting on public roads in Austin last week. Miami-Dade Fire Rescue has confirmed the plane struck “multiple vehicles” but has not said whether any Cybercabs were among them, and neither Tesla nor airport officials have addressed the fleet directly.
The Cybercabs had not yet entered commercial service in Miami. Tesla’s existing Robotaxi operation there runs on modified Model Y vehicles and has been unsupervised since Ashok Elluswamy confirmed the detail on X in July.
Footage of the plane crash from earlier today | #ONLYinDADE pic.twitter.com/iGoOtnd6cD
— ONLY in DADE (@ONLYinDADE) September 6, 2026
Elon Musk offered the briefest of reactions. Replying to a Zero Hedge post about the Cybercabs sitting so close to the wreckage, he wrote a single word: “Weird.” He has not commented further, and Tesla has not issued a statement.
The timing puts Tesla’s newest vehicle near an unrelated but highly visible tragedy just days after its Austin debut, a launch that had already drawn scrutiny from federal regulators. The National Highway Traffic Safety Administration opened an audit how Tesla certified the Cybercab as compliant with federal vehicle safety standards, a process Teslarati covered after the vehicle’s September 3 launch event. That inquiry concerns the car’s lack of a steering wheel and pedals, not the Miami crash.
Investigators from the FAA and NTSB are focused on the plane, not the parking lot beside it. Flight data reviewed by outlets including Simple Flying show the 767 touched down around 170 knots, well above the 135 to 140 knot range typical for the aircraft, though investigators have not determined a cause. Amazon said it is working with authorities and that its priority is the safety of everyone affected.
Whether any Cybercabs were damaged, and what Tesla plans for the fleet parked near one of the country’s busiest airports, remain open questions.
Featured
Tesla Cybercab is coming to Asia this month as US service officially begins
Tesla Asia says Cybercab will be on display in Hong Kong, Tokyo, Beijing and Shanghai this month.
Tesla’s Cybercab is heading to Asia. The official Tesla Asia account posted on X Thursday, inviting Cybercab fans to “Come experience the future of autonomy in Hong Kong, Tokyo, Beijing & Shanghai.” The post went up within hours of Tesla’s own Cybercab milestone in Texas, where the company said Thursday it had begun offering rides in across Austin.
Exact dates and venues for the Asia tour haven’t been released yet, though Tesla Hong Kong replied to the announcement with “Cybercab will be on display in Hong Kong soon,” while Tesla Japan’s response pointed fans to a sign up page for updates. Neither post mentions test rides or a service area, and nothing so far suggests Tesla is launching Robotaxi operations in any of the four cities. Based on how Tesla has run past Cybercab tours, in Europe in late 2024 and at US shopping centers that same December, the Asia stops are almost certainly static displays at Tesla stores or public venues as a means to stimulate buzz for its future driverless ride-hailing service in the big cities.
Cybercab will be on display in Asia this month!
Come experience the future of autonomy in Hong Kong, Tokyo, Beijing & Shanghai. pic.twitter.com/wGmmEastfX— Tesla Asia (@Tesla_Asia) September 4, 2026
The timing lines up with Tesla’s only prior Cybercab appearance in the region, a booth at the China International Import Expo in Shanghai last November, which Teslarati covered at the time. At that event, Tesla’s regional general manager for Shanghai framed the car as evidence of the company’s broader mission, a message Tesla has since formalized in its Master Plan Part IV, which states that “autonomous vehicles have the capacity to dramatically improve the affordability, availability and safety of transportation while reducing pollution, particularly in our increasingly dense global cities.” The same document is where Tesla lays out its “sustainable abundance” framing for Cybercab and Optimus alike, describing the two as the hardware behind an AI driven push to cut the cost of transportation and labor at scale.
Whether Cybercab actually operates as a robotaxi anywhere in Asia remains an open question, considering China has already pushed an autonomous ride-hailing market that’s run on homegrown players like Baidu’s Apollo Go and Pony AI. For now, the four city tour reads as a marketing push timed to Austin’s momentum.
Elon Musk
OpenAI cites distrust of SpaceX in decision to drop Cursor partnership
OpenAI will cut SpaceX-owned Cursor’s model access in November, citing Musk’s history of broken contracts.
OpenAI, the company behind ChatGPT, announced late Friday that it is ending its partnership with Cursor, cutting off the coding tool’s access to its models on November 12. The move comes two weeks after SpaceX completed its $60 billion acquisition of Cursor’s parent company, Anysphere, folding the popular AI coding assistant into Elon Musk’s growing SpaceXAI division.
In a post on its website, OpenAI said the decision came down to trust, not technology. “We cannot be confident that SpaceX will use our technology within our terms of service, based on our experience with Elon Musk’s companies violating contracts,” the company wrote. OpenAI pointed to two specific incidents: X, now part of SpaceX, allegedly breaking the terms of an existing OpenAI contract after Musk bought Twitter.
That lawsuit is the backdrop for all of this. Musk cofounded OpenAI in 2015, left the board in 2018, and sued Sam Altman and Greg Brockman in 2024, arguing they abandoned the company’s nonprofit mission for profit. A federal jury sided with OpenAI in May, finding Musk waited too long to sue rather than ruling on the merits of his claims. Musk said at the time he would appeal to the Ninth Circuit, calling the outcome a “calendar technicality” rather than a real judgment.
SpaceX’s interest in Cursor predates that verdict by weeks. The company first struck a deal with Cursor in April, securing an option to acquire it for $60 billion or pay $10 billion for joint development work instead. As Teslarati reported at the time, the logic was straightforward: Cursor was paying retail prices to Anthropic and OpenAI, two of its most direct competitors, every time a developer used its product, while SpaceX had idle capacity on its Colossus supercomputer, roughly the equivalent of a million Nvidia H100 GPUs, that Cursor could use to train its own models instead. SpaceX exercised the option in June, days after its own IPO, and the deal closed in mid-August.
Once it closed, Musk moved fast. On an all-hands call with more than 1,000 Cursor employees, he reportedly told staff that SpaceXAI’s Grok was playing catchup in the AI race, unlike Tesla and SpaceX in their own markets, and singled out Anthropic as the company to catch. Cursor CEO Michael Truell now reports directly to Musk inside SpaceXAI.
Losing OpenAI’s models leaves Cursor leaning harder on Anthropic’s Claude, which has its own compute agreement with SpaceX, and on Cursor’s in-house Composer model, the one SpaceX’s compute was supposed to accelerate in the first place. OpenAI framed the November deadline as maximum notice under its contract, and said it wants to “go above and beyond” to help developers through the transition. Whether Anthropic makes the same call is now the open question in AI coding.
Tesla Cybercabs narrowly miss deadly Amazon cargo plane crash
Tesla crosses major Unsupervised Self-Driving milestone
