Tesla Q1 2018 Earnings: $785M cash burned, $3.4B Revenue, Model 3 in focus

Tesla’s first-quarter earnings for 2018 saw the California-based carmaker beat Wall Street revenue estimates after posting $3.4 billion in revenue and beating earnings estimates with a loss of $568 million.

The results, which were posted in an update letter to investors after the closing bell on Wednesday, May 2, showed first-quarter earnings of -$3.35 per share, beating analyst estimates of -$3.58 per share. Revenue was $3.4 billion versus an estimate of $3.22 billion.

Revenue and Operating Losses

The company’s revenue for the first quarter consisted of $2.74B in automotive revenue and $410M from their energy and battery storage division. Automotive revenue saw an increase of 19.4% compared to the same period last year. The energy and battery storage division nearly doubled revenue with an increase of 91.6% compared to the same period last year. Overall, total revenue was up 26.4% year-on-year.

Automotive revenue slightly increased by 1.2% compared Q4 2017, while energy generation and storage increased significantly by 37.5%. Tesla deployed 76 MW of energy generation and 373 MWh of energy storage products in the first quarter as well.

Tesla posted operating losses of $563 million in the first quarter, primarily due to the ongoing ramp of the Model 3. On a per-share basis, the company posted a loss of $3.35 per share.

Model 3

Tesla was able to deliver 8,182 Model 3 vehicles during the first quarter of 2018. During the quarter the company produced 9,766 Model 3’s. The company’s Q1 2018 Update Letter maintained the company’s expectations of hitting the 5,000 a week production goal for the Model 3.

“After achieving a production rate of 5,000 per week, we will begin offering new options such as all-wheel-drive and the base model with a standard-sized battery pack,” Tesla stated in the letter.

The company reported that net Model 3 reservations are still above 450,000. Less than 20 Tesla stores have the Model 3 on display, and the company plans to deploy more Model 3’s to other stores.

Tesla Energy

Tesla did not state how much revenue the massive 129MWh South Australia project generated, stating, “substantial growth of our energy storage deployments and recognition of our large project in South Australia.”

Energy Storage and Generation generated $410 million worth of revenue for the company. The numbers are representative of Tesla Energy’s organic growth since the company acquired SolarCity back in 2016.

Earnings Highlights

• Tesla streamlined Model 3 battery pack production time by 96%, says Elon Musk
• Tesla explains oversight on Model 3 production line automation

“Electric utilities and power producers around the globe are increasingly appreciating the value proposition of our Powerpack storage systems based not only on economic benefits but also on the operational benefits of faster response time and greater reliability of the electric grid. In addition, we deployed a record number of residential Powerwall systems in Q1. In spite of the significant growth of Powerwall deliveries, our backlog in Q1 continued to grow,” Tesla stated in the quarterly letter.

Guidance for the end of 2018

Tesla expects to deliver 100,000 Model S and X vehicles for 2018. The company also reiterated its goal of producing 5,000 Model 3 per week by the end of the second quarter. Tesla did not disclose an overall production target for the Model 3 in 2018.

Tesla also expects its Energy products to start generating more revenue, in light of more battery storage projects and the start of residential installations of Solar Roof tiles. The company also expects to see revenue from its Supercharger network, due to the increasing number of Model 3 using the charging facilities.

Tesla has just over $2.67 billion in cash at the end of the quarter, down from $3.37 billion in the previous quarter.

Today’s trading session ended with TSLA closing up 0.41% at $301.15. After-hours, the stock was trading up nearly another 2%.

Tesla’s full Q1 2018 Update Letter can be accessed here.