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.
Elon Musk
Tesla stock gets latest synopsis from Jim Cramer: ‘It’s actually a robotics company’
“Turns out it’s actually a robotics and Cybercab company, and I want to buy, buy, buy. Yes, Tesla’s the paper that turned into scissors in one session,” Cramer said.
Tesla stock (NASDAQ: TSLA) got its latest synopsis from Wall Street analyst Jim Cramer, who finally realized something that many fans of the company have known all along: it’s not a car company. Instead, it’s a robotics company.
In a recent note that was released after Tesla reported Earnings in late January, Cramer seemed to recognize that the underwhelming financials and overall performance of the automotive division were not representative of the current state of affairs.
Instead, we’re seeing a company transition itself away from its early identity, essentially evolving like a caterpillar into a butterfly.
The narrative of the Earnings Call was simple: We’re not a car company, at least not from a birds-eye view. We’re an AI and Robotics company, and we are transitioning to this quicker than most people realize.
Tesla stock gets another analysis from Jim Cramer, and investors will like it
Tesla’s Q4 Earnings Call featured plenty of analysis from CEO Elon Musk and others, and some of the more minor details of the call were even indicative of a company that is moving toward AI instead of its cars. For example, the Model S and Model X will be no more after Q2, as Musk said that they serve relatively no purpose for the future.
Instead, Tesla is shifting its focus to the vehicles catered for autonomy and its Robotaxi and self-driving efforts.
Cramer recognizes this:
“…we got results from Tesla, which actually beat numbers, but nobody cares about the numbers here, as electric vehicles are the past. And according to CEO Elon Musk, the future of this company comes down to Cybercabs and humanoid robots. Stock fell more than 3% the next day. That may be because their capital expenditures budget was higher than expected, or maybe people wanted more details from the new businesses. At this point, I think Musk acolytes might be more excited about SpaceX, which is planning to come public later this year.”
He continued, highlighting the company’s true transition away from vehicles to its Cybercab, Optimus, and AI ambitions:
“I know it’s hard to believe how quickly this market can change its attitude. Last night, I heard a disastrous car company speak. Turns out it’s actually a robotics and Cybercab company, and I want to buy, buy, buy. Yes, Tesla’s the paper that turned into scissors in one session. I didn’t like it as a car company. Boy, I love it as a Cybercab and humanoid robot juggernaut. Call me a buyer and give me five robots while I’m at it.”
Cramer’s narrative seems to fit that of the most bullish Tesla investors. Anyone who is labeled a “permabull” has been echoing a similar sentiment over the past several years: Tesla is not a car company any longer.
Instead, the true focus is on the future and the potential that AI and Robotics bring to the company. It is truly difficult to put Tesla shares in the same group as companies like Ford, General Motors, and others.
Tesla shares are down less than half a percent at the time of publishing, trading at $423.69.
There are a lot of Tesla bulls out there who have astronomical expectations for the company, especially as its arm of reach has gone well past automotive and energy and entered artificial intelligence and robotics.
However, some of the most bullish Tesla investors believe the company could become worth $100 trillion, and CEO Elon Musk does not believe that number is completely out of the question, even if it sounds almost ridiculous.
To put that number into perspective, the top ten most valuable companies in the world — NVIDIA, Apple, Alphabet, Microsoft, Amazon, TSMC, Meta, Saudi Aramco, Broadcom, and Tesla — are worth roughly $26 trillion.
Will Tesla join the fold? Predicting a triple merger with SpaceX and xAI
Cathie Wood of ARK Invest believes the number is reasonable considering Tesla’s long-reaching industry ambitions:
“…in the world of AI, what do you have to have to win? You have to have proprietary data, and think about all the proprietary data he has, different kinds of proprietary data. Tesla, the language of the road; Neuralink, multiomics data; nobody else has that data. X, nobody else has that data either. I could see $100 trillion. I think it’s going to happen because of convergence. I think Tesla is the leading candidate [for $100 trillion] for the reason I just said.”
Musk said late last year that all of his companies seem to be “heading toward convergence,” and it’s started to come to fruition. Tesla invested in xAI, as revealed in its Q4 Earnings Shareholder Deck, and SpaceX recently acquired xAI, marking the first step in the potential for a massive umbrella of companies under Musk’s watch.
SpaceX officially acquires xAI, merging rockets with AI expertise
Now that it is happening, it seems Musk is even more enthusiastic about a massive valuation that would swell to nearly four-times the value of the top ten most valuable companies in the world currently, as he said on X, the idea of a $100 trillion valuation is “not impossible.”
It’s not impossible
— Elon Musk (@elonmusk) February 6, 2026
Tesla is not just a car company. With its many projects, including the launch of Robotaxi, the progress of the Optimus robot, and its AI ambitions, it has the potential to continue gaining value at an accelerating rate.
Musk’s comments show his confidence in Tesla’s numerous projects, especially as some begin to mature and some head toward their initial stages.
Elon Musk
Tesla director pay lawsuit sees lawyer fees slashed by $100 million
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
The Delaware Supreme Court has cut more than $100 million from a legal fee award tied to a shareholder lawsuit challenging compensation paid to Tesla directors between 2017 and 2020.
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
Delaware Supreme Court trims legal fees
As noted in a Bloomberg Law report, the case targeted pay granted to Tesla directors, including CEO Elon Musk, Oracle founder Larry Ellison, Kimbal Musk, and Rupert Murdoch. The Delaware Chancery Court had awarded $176 million to the plaintiffs. Tesla’s board must also return stock options and forego years worth of pay.
As per Chief Justice Collins J. Seitz Jr. in an opinion for the Delaware Supreme Court’s full five-member panel, however, the decision of the Delaware Chancery Court to award $176 million to a pension fund’s law firm “erred by including in its financial benefit analysis the intrinsic value” of options being returned by Tesla’s board.
The justices then reduced the fee award from $176 million to $70.9 million. “As we measure it, $71 million reflects a reasonable fee for counsel’s efforts and does not result in a windfall,” Chief Justice Seitz wrote.
Other settlement terms still intact
The Supreme Court upheld the settlement itself, which requires Tesla’s board to return stock and options valued at up to $735 million and to forgo three years of additional compensation worth about $184 million.
Tesla argued during oral arguments that a fee award closer to $70 million would be appropriate. Interestingly enough, back in October, Justice Karen L. Valihura noted that the $176 award was $60 million more than the Delaware judiciary’s budget from the previous year. This was quite interesting as the case was “settled midstream.”
The lawsuit was brought by a pension fund on behalf of Tesla shareholders and focused exclusively on director pay during the 2017–2020 period. The case is separate from other high-profile compensation disputes involving Elon Musk.
Musk bankers looking to trim xAI debt after SpaceX merger: report
SpaceX launches Crew-12 on Falcon 9, lands first booster at new LZ-40 pad
