Investor's Corner
Tesla (TSLA) posts Q2 2018 financial results: $4B revenue, profitability in focus
Tesla’s second-quarter earnings for 2018 saw the California-based carmaker beat Wall Street revenue estimates after posting $4B billion in revenue and missed earnings estimates with a non-GAAP loss of $520 million.
The results, which were posted in an update letter to investors after the closing bell on Wednesday, August 1st, showed second-quarter earnings of -$3.06 per share, slightly worse analyst estimates of -$2.92 per share. Compared to the previous year, revenue grew 43.5%.
The company burned through $430M in cash in the second quarter.
REVENUE AND OPERATING LOSSES
The company’s revenue for the second quarter consisted of $3.36B in automotive revenue and $374M from their energy and battery storage division. Automotive revenue saw an increase of 46.8% compared to the same period last year. The energy and battery storage division saw an increase of 30.6% compared to the same period last year.
Automotive revenue increased by 22.75% compared to Q1 2018, largely due to the rapid increase in Model 3 sales, while energy generation and storage declined by 8.7%. Tesla deployed 84 MW of energy generation and 203 MWh of energy storage products in the second quarter as well.
MODEL 3
Tesla was able to deliver 18,449 Model 3 vehicles during the second quarter of 2018. In the quarter the company produced 28,578 Model 3’s. The company’s Q2 2018 Update Letter stated that the company still expects to reach its production goal of 6,000 Model 3’s per week by the end of August.
The company is aiming to reach a gross margin of 25% on the Model 3 in the long-term but set an initial goal of break-even for the second quarter. The company beat that goal in the quarter posting a slightly positive gross margin. After conducting a complete breakdown, an automotive expert recently estimated that Tesla could achieve a 30% or higher gross margin on the vehicle.
“Over the past 12 months, we have overcome bottlenecks across various stages of the Model 3 manufacturing process. Last quarter, it became clear that GA3, our main general assembly line, would likely become a production constraint if certain issues were not addressed. This assembly line, which is where we add all the components to a painted metal body, was designed to work with hundreds of robotic lifters that bring components to the line. Due to the density of the line and the relatively high downtime of the lifters, ramping GA3 became substantially more complicated than we had anticipated. That said, significant progress has been made in the last few months, and GA3 is now expected to reach a production rate of 5,000 per week very soon,” Tesla stated in the letter.
The company reported that they have received over 60,000 test drive requests for the Model 3. Most Tesla stores received their first Model 3 test drive vehicles and the company plans to continue deploying more Model 3’s to other stores, with a focus on the new Model 3 Dual Motor Performance. The company stated that early results show that the Model 3’s “test drive-to-order conversion rate” is higher than the Model S and X.
TESLA ENERGY
Tesla deployed 203MWh of energy storage in the second quarter and 84MW of solar energy generation systems. Tesla stated that the company’s solar and energy storage division has undergone massive changes as they prepare to exclusively sell the products online and at Tesla stores.
Energy Storage and Generation generated $374M worth of revenue for the company in the quarter. Tesla stated that 68% of all installations were cash and loan based, compared to lower-revenue generating lease-based sales.
“We are steadily ramping Solar Roof production in Buffalo and are also continuing to iterate on the product design and production process, learning from our early factory production and field installations. We have deployed Solar Roof on additional homes in Q2 and are gaining valuable feedback from each new installation. We plan to ramp production more toward the end of 2018 and are working hard to simplify the production and installation process before deploying significant capital into factory automation,” Tesla stated in the quarterly letter.
GUIDANCE FOR THE END OF 2018
Tesla still expects to deliver 100,000 Model S and X vehicles for 2018. The company also stated it targets to produce 50,000-55,000 Model 3’s in the third quarter. Tesla still did not disclose an overall production target for the Model 3 in 2018. The Model 3 is expected to carry a 15% gross margin for the third quarter and 20% in the fourth quarter.
Tesla reiterated that they expect to be GAAP profitable in both the third and fourth quarter of 2018. Tesla also stated that they expect the company to be profitable going forward, despite rapid growth.
Tesla has just over $2.23 billion in cash at the end of the quarter, down from $2.67 billion in the previous quarter.
Today’s trading session ended with TSLA closing up .9% at $300.85. After-hours, the stock was trading up 3.9%.
Tesla’s full Q2 2018 Update Letter can be accessed here.
Investor's Corner
Tesla warns Elon Musk could step down if shareholders reject pay plan
Denholm’s letter emphasized Tesla is at a “critical inflection point” as it scales AI-driven projects such as Full Self-Driving (FSD) and Optimus.
Tesla Board Chair Robyn Denholm has urged shareholders to approve CEO Elon Musk’s new 2025 Performance Award ahead of the November 6 Annual Meeting, warning that rejecting it could risk losing his leadership.
In a letter posted on Tesla’s official handle on X, Denholm stated that the company must “foster an environment that motivates Elon to achieve great things,” or risk losing “his time, talent, and vision,” which she described as essential to Tesla’s success.
Retaining Musk amid Tesla’s critical transition
Denholm’s letter emphasized Tesla is at a “critical inflection point” as it scales AI-driven projects such as Full Self-Driving (FSD) and Optimus. She argued that Musk’s leadership remains vital as Tesla pushes toward becoming “the leading provider of autonomous solutions and the most valuable company in the world.” Without a new performance-based plan, Denholm warned, Musk could step away, potentially costing Tesla significant long-term value.
“If we fail to foster an environment that motivates Elon to achieve great things through an equitable pay-for-performance plan, we run the risk that he gives up his executive position, and Tesla may lose his time, talent, and vision, which have been essential to delivering extraordinary shareholder returns,” the Tesla Board Chair stated.
The board’s proposed 2025 Performance Award aligns Musk’s compensation with ambitious targets while extending his commitment for at least 7.5 more years. Denholm stated that the vote is a defining moment for Tesla’s future direction, adding that the plan was designed to keep Musk focused on innovation while maintaining governance discipline. “A vote here is both an endorsement of Elon’s vision and a vote for Tesla’s carefully tailored strategy,” she said.
Musk’s pay history is rooted in performance
Elon Musk’s pay history with Tesla has long been unconventional. For years, he has declined a regular salary, instead directly tying his earnings to Tesla’s ability to meet ambitious production and market-value goals. His 2018 performance award, approved by shareholders at a time when Tesla had a market cap of just about $59 billion, granted him stock options only when Tesla reached aggressive growth milestones, such as growing the company’s market cap to $650 billion.
At the time, the milestones included $50 billion additions to Tesla’s market cap, which were considered by many to be unrealistic. Those goals were ultimately met by the electric vehicle maker, but a Delaware court later rescinded the plan in January 2024, calling it an “unfathomable sum.”
Tesla shareholders reaffirmed support for Musk’s pay in 2024, even as legal disputes continued. The board then issued an interim equity package valued around $29 billion while developing a new long-term plan earlier this year. Since then, Tesla’s Board has proposed Musk’s 2025 CEO Performance Award, which could be worth nearly $1 trillion, but only if Musk were to grow Tesla into the world’s most valuable company with a market cap of $8.5 trillion, among other aggressive and ambitious targets.
Investor's Corner
Cantor Fitzgerald raises Tesla PT To $510, citing Cybercab, Semi, and AI momentum
The firm cited upcoming production milestones for the Cybercab, Semi, and Optimus as key drivers behind its revised valuation.
Cantor Fitzgerald has boosted its Tesla (NASDAQ:TSLA) price target from $355 to $510 per share, maintaining an “Overweight” rating over its continued confidence in the company’s long-term growth.
Analyst Andres Sheppard cited upcoming production milestones for the Cybercab, Semi, and Optimus as key drivers behind Cantor Fitzgerald’s revised valuation, as well as expanding opportunities in Tesla’s Energy and Full Self-Driving initiatives.
Major growth from multiple Tesla programs
According to Sheppard, Tesla disclosed that volume production for the Cybercab, Semi, and Megapack 3 is on track for fiscal year 2026, with Optimus production lines also targeted to launch next year. The analyst highlighted these updates as “significant,” noting that Tesla’s diverse roadmap continues to reinforce its position as a vertically integrated energy and AI company.
Cantor Fitzgerald now expects Tesla’s capital expenditures at approximately $9.2 billion for FY2025 and around $12 billion for FY 2026, a substantial increase tied to the company’s efforts to further scale its operations. The analyst noted that these investments align with Tesla’s push into robotics, autonomous driving, and energy storage.
Confidence in AI-driven expansion
Tesla shares closed at $433.72 last Friday, giving Cantor Fitzgerald’s $510 price target an implied upside of roughly 17.6%. The revised forecast reflects the firm’s expectation that Tesla’s long-term value extends far beyond vehicle sales, with strong upside from the company’s FSD, Robotaxi/Cybercab, Semi, and Optimus initiatives, as noted in a StreetInsider report.
“Overall, we remain bullish on TSLA over the medium to long term,” Sheppard wrote. “We continue to see meaningful future upside from Energy Storage & Deployment, FSD, Robotaxis/Cybercab, Semis, and Optimus Bots.”
Tesla highlighted these key initiatives in its Q3 2025 Update Letter. “We continue to evolve and augment our product lineup with a focus on cost, scale and future monetization opportunities via services powered by our AI software. Cybercab, Tesla Semi and Megapack 3 are on schedule for volume production starting in 2026,” the company wrote.
Investor's Corner
Tesla (TSLA) Q3 2025 earnings: Wall Street’s reactions
Tesla’s third-quarter 2025 results delivered the highest quarterly revenue in company history, and Wall Street analysts are taking notice.
Tesla’s third-quarter 2025 results delivered record quarterly revenues, and Wall Street is taking notice.
The automaker reported $28.1 billion in revenue, topping estimates of $26.4 billion, while non-GAAP EPS landed at $0.50 versus $0.54 expected. Despite the slight earnings miss, Tesla’s free cash flow surged to nearly $4.0 billion and total cash on hand jumped to $41.6 billion, a new high.
The following are some of Wall Street’s reactions to Tesla’s third-quarter results.
Mizuho
Mizuho analyst Vijay Rakesh maintained an “Outperform” rating on Tesla and raised the firm’s price target to $485 from $460 per share, pointing to Tesla’s next-generation autonomy roadmap. “We see 2026E better with stronger FSD traction and deliveries. TSLA is focusing on AI5/HW5 with ~40x gains gen/gen, while ramping Robotaxis and FSD into 2026E–27E.”
Rakesh also highlighted that Mizuho sees Tesla as “well-positioned” to lead “physical AI with Cybercab/FSD traction, humanoid longer term, offset by near-term demand headwinds.”
Wedbush
Wedbush analyst Dan Ives reiterated his “Outperform” rating and $600 price target on Tesla. As per the analyst, “Tesla reported its FY3Q25 results featuring beats on the top-line while missing bottom-line expectations as the company benefitted from a pull-forward in its delivery segment with greater strength across EMEA and APAC while making gradual progress with its autonomous and energy businesses.”
He also pointed to Musk’s upcoming compensation vote as a key inflection point: “We believe it will be approved by a wide margin despite some opposition,” Ives noted. “That will be incremental to keeping Musk as a war-time CEO as the company enters a critical AI expansion phase.”
Baird
Baird analyst Ben Kallo reiterated his “Outperform” rating and $548 per share price target for Tesla following the company’s Q3 2025 earnings results. He praised Tesla’s energy segment for delivering record results.
“Energy demand is particularly high given grid constraints in several regions and a rapid build-out of infrastructure. We expect this piece of the business to capture more attention in the remainder of 2025 and moving into 2026 with the tipping points for longer-term initiatives (Optimus, robotaxi, etc.) more opaque,” Kallo noted.
Deepwater
Meanwhile, Deepwater’s Gene Munster struck a more measured tone. “The September numbers and earnings call were largely uneventful,” Munster said, adding that Tesla’s decision to move cautiously with robotaxis in Austin is the right one.
“Shares of TSLA traded down following Elon’s comment that he remains paranoid about the safety of Robotaxi given any accidents would represent a significant step back in terms of the public’s confidence in the fleet,” he wrote. Munster, however, emphasized that Tesla’s cash position is a major strength: “They have enough cash to will Elon’s vision into reality. It may take a lot longer than many expect, but they’ve got the cash to get there.”
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