Tesla Reports Large Q4 Loss, But Shares Soar On 80k-90k Sales Guidance/Profit In 2016

1 year ago by Jay Cole 111

Tesla Q4/FY 2015 Results Released After-Hours On Wednesday, February 10th

Tesla Q4/FY 2015 Results Released After-Hours On Wednesday, February 10th

Given the recent shelling Tesla’s stock price has taken (down some 37% for the first six weeks of the year), and the recent confirmation of Model 3 pricing, this earnings report is probably the most important to the company today.

Investors Keenly Look To Tesla For Update On Production Progress Surrounding The Model X

Investors Keenly Look To Tesla For Update On Production Progress Surrounding The Model X

Heading into the report the street had been expecting a profit of 8 cents a share, which compares to a loss of 13 cents a year ago. Quarterly revenue was expected to grow 64%percent to ~$1.79 billion.

In actual fact, Tesla logged an 87 cent loss per share gain on $1.75 billion dollars.  (13 cents due to unrealized losses from foreign currency revaluation)

But more important than those numbers for this quarter was Tesla’s positive outlook for 2016 for the Model S and Model X, a forecast of profitability in 2016, and reconfirmations in the Model 3 and its roll-out.

Shares ended after hours trading Wednesday night up 9.6% at $157.50 +13.83, after peaking at up 12%  (real-time quote here). Despite wider indices losses (what’s new lately) Thursday morning, the stock held onto a 6-8% increase in early trading.

For 2016 Tesla guided higher than expected sales stating:

“…we plan to deliver 80,000 to 90,000 new Model S and Model X vehicles in 2016, representing accelerating growth over 2015 at the midpoint of the range.”

Tesla also weighed in on demand for the Model S saying that orders grew by 35% (year-over-year) in Q4, with that growth coming in all major regions. As for the impact of much lower gas…Tesla is not feeling it.

“We continue to see no perceptible impact to our order growth from the change in the price of gasoline as our order rates have continued to increase even as the price of gasoline has fallen.”

Margins for the quarter also came in lower than expect at just 20%, but Tesla says big changes in that number will occur in 2016.

“Throughout the rest of 2016, Automotive gross margin should continue to increase, helped by cost reductions for Model S and improving margin on Model X as our manufacturing efficiency improves for that vehicle. By year-end, Model S gross margin should begin to approach 30% and Model X gross margin should be about 25%, with continued improvement for Model X in 2017.”

Future Profitability and Cash Flow

Tesla Cash Flow From Core Operations For 2015

Tesla Cash Flow From Core Operations For 2015

From Tesla’s “core operations” the company said it generated $179 million of positive cash flow – a first.

For next year the company states it will be profitable for the first time, despite ramp up of production and battery production at its Nevada facility.

“For 2016, we are planning for even faster delivery growth than last year. We plan to be net cash flow positive and achieve non-GAAP profitability for the year, even after investing about $1.5 billion to add more production capacity, start cell production at the Gigafactory, and establish additional customer support infrastructure.”

If you enjoy your numbers GAAP-style, Tesla says profitability on that metric will arrive in Q4 of 2016.

Model S/Model X Q4 Production And Outlook

Besides logging 17,487 sales (881 of them being leases), Tesla produced 14,037 new vehicles during the quarter.  The company also noted that when it came to Model X, they limited production “for a period of time to maintain our quality production standards.”

“We are already seeing improvement from these efforts and we are now significantly increasing our Model X production throughout the balance of the quarter. We anticipate approaching a Model X production rate of 1,000 vehicles a week in Q2.”

From Conference Call:  Elon Musk clarifies at 1,000 a week is peak production for Q2 on Model X, might average out to 700 to 800 overall.  Overall production between the Model S and X in 2016 should between 1,600 and 1,800.

As for sales estimates in Q1:

“In Q1, we plan to grow deliveries 60% year on year to approximately 16,000 vehicles, and we plan to directly lease about the same percentage of cars as we did in Q4.”

Tesla Model S Sales To Accelerate In 2016

Tesla Model S Sales To Accelerate In 2016

Tesla Model S

Tesla Sales In The US Versus Major Competitors

Tesla Sales In The US Versus Major Competitors

Of the 50,366 Model S sedans sold in 2015, Tesla detailed that it outsold all of its luxury competitors in the US with 25,202 sales.

“In the U.S., just over three years after entering the market, Model S took share from all incumbent manufacturers to become the number one selling comparably priced four-door sedan.”

Tesla also took some time to talk about the dominant presence of the Model S internationally.

“Even on our competitors’ home turf and in countries without government incentives to purchase electric vehicles, Model S is winning. For example, in Switzerland, Model S outsold the Mercedes Benz S-Class, the BMW 7-Series, the Porsche Panamera and the Audi A-8 combined for the full year, and also outsold the Mercedes Benz E-Class.

In Germany in Q4, Model S outsold the Porsche Panamera. Finally, across all of Europe last year Model S outsold the Audi A8 and A7 combined and the BMW 7-Series and 6-Series combined.”

From Conference Call:  Tesla CEO Elon Musk says lots of opportunity to expand sales in US North East

Editor’s Note:  Now with confirmed 2015 numbers, our monthly scorecard (for all EVs sold in America) that estimated Tesla sales for 2015 at 25,700 has been adjusted to reflect these confirmed sales

Tesla Model 3 Update

As Tesla had mentioned in the past, the company will be unveiling the Model 3 in March, and in true Tesla style, that will come at the very end of the quarter – on March 31st.

Tesla states that that the ramp up to the car is on track, and they still aim for production AND deliveries in late 2017.

From Conference Call: Musk states that unlike other new car releases, the Model 3 won’t be offered in the base/entry level trim before an higher option versions, as  Tesla wants high initial sales on the Model 3 to quickly pay off tooling.   Tesla also won’t show “all their cards” on Model 3 launch.  Model 3 will compete with BMW 3-series and Audi A4.

Model X Demand Still High According To Tesla

Model X Demand Still High According To Tesla

Tesla Model X Update

As one would expect, Tesla said that Model X reservations grew by more than 75% over orders taken previously, but did not break down the total number of reservations, or the follow-through to sales that was being achieved – an important number considering some reservists have been waiting multiple year.

Tesla did somewhat acknowledge a miss in planned deliveries of the X in Q4 stating margins were burdened in part by “unfavorable labor and overhead allocations associated with lower than planned Model X production volume”.

From Conference Call: conversion rate of Model X reservists to order was classes as “strong”, but without any numbers to define the metric

Pre-Owned Model S Update

“We are also seeing strong demand for pre-owned Tesla vehicles, which are trading at prices higher than our expected residual values. This residual performance is enabling our financing partners to reduce both lease and monthly loan payments”.

Evidence of this new ability to lower rates on new cars was seen last month when Tesla announced new lease offers across the lineup in the US, starting from $698* per month.

Tags: , , , , , ,

111 responses to "Tesla Reports Large Q4 Loss, But Shares Soar On 80k-90k Sales Guidance/Profit In 2016"

  1. Get Real says:

    Here comes the short-selling trolls who persistently post their anti-Tesla, chicken little FUD here all the while driving gas cars!

    1. sven says:

      They are preceded by the Telsa fanboyz, Tesla apologists, and Musk rats!

      1. ffbj says:

        A race to the bottom?

    2. evcarnut says:

      0f course there will losses , they’re putting all the $$Profits$$ right back into Tesla to grow the company..there’s no magic it’s the way things work !..Unlike the BIG 3 Where all the Execs Take Bonuses as the company goes down the DRAIN!!!!!

      1. Three Electrics says:

        There are no profits. Unlike other auto manufacturers, Tesla’s gross margin does not include R&D costs. Add those costs back, and there is no gross margin. This isn’t really excusable–in order to grow sales, they must keep tweaking existing models and adding new ones, so R&D grows proportionally to sales. Thus, it should be included in margin.

        1. Pushmi-Pullyu says:

          The incessant and highly repetitive FUD post by Three Oil Companies Three Electrics and others, reminds me of the apocryphal tale about engineers and bees: That supposedly, aeronautical engineers kept insisting that bees couldn’t fly, because their equations showed they didn’t have a good enough lift-to-mass ratio. Yet the bees ignored this and kept right on flying!

          Similarly, Tesla keeps ignoring all the FUDsters who keep claiming they’re not making money. Tesla just keeps growing at a rate much faster than any other auto maker of note, while continuing to upgrade their existing Model S and continuing to garner love letters from car reviewers.

          I guess Three Oil Companies and his fellow trolls think InsideEVs readers are incredibly stupid, if they think we’d believe such obvious B.S.

          1. tftf says:

            “Similarly, Tesla keeps ignoring all the FUDsters who keep claiming they’re not making money.”

            Seriously, what is your background in corporate finance or similar?

            If you believe in made-up metrics like core operational cash-flows, good luck to you.

            Or can you tell me why Tesla stopped reporting free-cash flows?

            And do you believe in their 2016 guidance since they missed 2015 guidance big time (then revised down and barely made that number)?

            1. Big Solar says:

              Truth in what you are both trying to say but fact is that Tesla continues to grow and have a lot of happy customers and investors. Compared to GM they look like decent people.

              1. Three Electrics says:

                Absolutely. GM and VW will remain on my sh*t list for years to come, whereas Teslas goals and behavior are quite admirable.

                However, I want to remain as objective as possible, and acknowledge that Tesla does not make money. Retained earnings after this quarter will soon approach negative $2.5 billion: https://ycharts.com/companies/TSLA/retained_earnings

                That’s -$20K per car ever sold. Note that this number excludes capital expenditures on factories, etc. It’s money that can never be recovered through sale of assets.

                So far, Tesla has shown that you can make amazing cars if you’re willing to lose an unbelievable amount of money on each one. Kind of an obvious point, I suppose.

                1. Josh says:

                  $2.5 billion is roughly what a big OEM puts into a new vehicle platform. So for Tesla to go from not a company at all to 2 (or 3 if you count AWD) generations of their technology for that amount is pretty impressive.

                  New technology doesn’t come cheap, especially in the automotive field. It is more important for Tesla to keep pushing the technology, than to turn a profit in the near term. As long as they can continue to finance their development.

                2. Pushmi-Pullyu says:

                  Three Oil Companies Three Electrics said:

                  “Tesla has shown that you can make amazing cars if you’re willing to lose an unbelievable amount of money on each one.”

                  What an absolutely perfect illustration of what’s wrong with claiming Tesla isn’t making a profit.

                  To take that assertion to its (il)logical conclusion: If Tesla loses money on each car, then Tesla should make fewer cars, so it can lose less money. In fact, it should stop making cars altogether, so it won’t lose any money.

                  Right, Three Oil Companies?

                  Ludicrous™.

                3. Mint says:

                  That’s such a moronic way of looking at things. In Jan 2013, your methods would give you a figure of $200,000 lost per car sold.

                  Tesla has spent huge amounts on full Model X development, some Model 3 development, gigafactory R&D (beyond things that count as capex), etc but has essentially been living off revenue of just one model’s sales. It’s nowhere near the approximate equilibrium that virtually all automakers live in.

                  Tesla’s value as a company is entirely about on future expected earnings, and that expectation comes from a lot more relevant evidence than dividing retained earnings by number of cars sold.

                4. Nix says:

                  Three Electrics, you are making the same mistake as the trolls who said it cost GM hundreds of thousands of dollars to build each Chevy Volt.

                  You can’t simply divide investment into a company by the number of units produced to date. That is silly.

                  But I find it very interesting that you chose just one of the YChart graphs to post, talking about the $2 Billion, while ignoring that Tesla also built a company with a $20 Billion dollar Enterprise Value over that same time:

                  https://ycharts.com/companies/TSLA/enterprise_value

                  Now, which is bigger? $2 Billion, or $20 Billion?

                  1. Aaron says:

                    Cool chart. Interesting Tesla is JUST behind FCA. That is truly amazing.

            2. Pushmi-Pullyu says:

              tftf said:

              “Seriously, what is your background in corporate finance or similar?”

              As I said the last time you asked me that question, tftf: This is a subject on which I treasure my ignorance.

              But unlike you, I have not lost sight of the forest for the trees. Tesla is a successful, growing company, and they make a good profit margin on every single car they sell… unlike many larger auto makers.

              When an investor like you says “a company is profitable”, you have a very narrow meaning: That it will give dividends to its stockholders.

              No, Tesla isn’t giving dividends, and the company has stated quite clearly it doesn’t plan to for some years; it plans to keep re-investing its profits into growing the company.

              You know… those profits which you keep insisting Tesla isn’t making.

              “And do you believe in their 2016 guidance since they missed 2015 guidance big time (then revised down and barely made that number)?”

              No; Tesla has missed its guidance very slightly every year for a few years. Nor do I believe Tesla when it says they will show a net positive income in 2016. I think they have said that every year for a few years in a row now, and it never comes to pass.

              You anti-TESLA FUDdites want to make a big deal about those things; nobody else will care much, so long as Tesla keeps succeeding, keeps growing, keeps exceeding nearly all financial analysts’ expectations.

              None of that alters the fact — fact, tftf, not opinion — that Tesla is a successful and rapidly growing company. Most people would define that as “profitable”. It’s the same financial strategy Amazon.com used when it was growing to the world’s largest retailer. And just like Tesla, investors kept whining that Amazon.com “isn’t profitable”. Yet by every common sense definition, Amazon.com was and is highly profitable indeed!

              If you honestly don’t think Tesla is a profitable company, tftf, then that’s an indication you’ve been educated beyond your intelligence on financial matters… that you’ve lost sight of the forest for the trees. An example of examining the leaves on one or two trees, instead of the state of health of the entire forest, is your attempt to drag the conversation down into the weeds of “core operational cash-flows” and “free-cash flows”.

              But I doubt you honestly believe that Tesla isn’t a highly profitable company. I think you know better. I think that’s just your anti-Tesla short-selling, truth-twisting propaganda.

              1. Josh says:

                There is a difference between selling a vehicle with a positive gross margin and the entire company turning a profit. You are about the former, he is talking about the latter.

                1. Pushmi-Pullyu says:

                  No.

                  TSLA short-sellers are trying to get us to believe that re-investing all its profits in growing the company is the same as “not making a profit”.

                  Now, if Tesla was taking its profits and throwing the money away, then it would be appropriate to talk about the company as being “unprofitable”.

                  But to describe investing profits in future growth as “unprofitable” is attempting to promote a perverted definition of “profit”.

                  Tesla is not failing to be profitable; it’s deferring profits to a future date in order to increase profits at that time. Just like Amazon.com, when it was growing to become the world’s largest retail seller.

                  And yeah, there were a lot of investors wrongly describing Amazon.com as “not profitable”, too, until quite recently. How did that work out for them, hmmm?

              2. sven says:

                Pushmi-Pullyu said:
                “. . .[Tesla] plans to keep re-investing its profits into growing the company.”

                “You know… those profits which you keep insisting Tesla isn’t making.”

                For the umpteenth time, Tesla has no profits to re-invest into growing the company. Tesla has negative retained earnings (the sum of net profits and losses since the company was formed).

                Since Tesla didn’t have a net profit for 2015 or any prior year, it has negative retained earnings, and therefore is financing its growth and Gigafactory with the following:

                -capital (cash) it raised from it’s IPO
                -line of credit (money borrowed short term)
                -issuing debt (bonds, convertible notes like it did in 2013)
                -capital raise from issuing addition stock (like it did in 2013 & 2015)
                -executives exercising stock options (like Musk did a few weeks ago).

                All of the above raise cash (capital) for Tesla by issuing either debt or equity.

                Gross profits are sales minus cost of good sold. You still have to deducts all of the company’s expenses to calculate net income or loss. When a company’s total expenses are greater than its total revenues, like Tesla’s have been every year since it’s IPO, the company is not profitable. It shows a net loss for the year. If the sum total of annual net losses exceed any annual net profits, then you have negative Retained Earnings, like Tesla does. Retained Earnings is the scorecard for profitability.

                This is basic, fundamental accounting. They teach this in the entry level Accounting 101 course in college.

                If you deny the above, you are a fool.

                1. Tech01x says:

                  But it matters what they spend the money on – the R&D cost isn’t for the Model S they are selling in the past quarter. Plus, you do have to add back in the lease accounting and residual value guarantees. They have a big chunk of deferred revenue as well as finished goods in transit. The finished goods inventory overhang each quarter rises as their production rate rises.

                  Also, their SG&A does reflect costs for build out (beyond capex) for expansion – new service centers, new galleries, etc. It doesn’t make any sense to look at such a growth company like it was a mature company.

                  1. zzzzzzzzzz says:

                    There is R&D that is useful for the future models and there is R&D that is specific to Model S and it is required again for each new model or platform. You can’t make new technology cars without continued flow of money into R&D and you should account for it, not just pretend it is some “future investment”.

                    Certainly Tesla can get profitable if it increases production 10 fold. It didn’t happened yet and nobody really knows if and when it will happen.

                    1. Nathanael says:

                      (a) Damn near all of Tesla’s R&D is core-technology R&D.

                      From a proper accounting point of view, it should really have been capitalized and treated as a capital expense, but it wasn’t. This artificially lowers Tesla’s “operating” results.

                      (b) Tesla will produce 5x as many cars per year with the Model 3. That’s the actual plan. And it’s scheduled to happen in 2018. So we do know when they’ll get 5 times as large (though not “10 times as large”).

                2. pjwood1 says:

                  Retained earnings aren’t the way Tesla said it would go, in 2015. Why would you, if the business is there to develop a company? Putting funds into RE is akin to paying a dividend, something growth stocks do when they’re no longer growth stocks, or can’t see opportunity for investment.

                  Even negatative net free cash flow is fine, for Tesla. Porsche’s blume is supporting a shrinking company (VWG), so this may be a bit hard for him to understand. He also doesn’t have shareholders with the mindset of Tesla’s shareholders. Tesla’s tolerate a high ratio of future earnings in the price multiple, giving company managment room to breathe.

                  I think part of the problem is when you expense, more than you capitalize for new endeavors, you also end up with what I think you are calling this “negative retained earnings”. There are worse problems to have, than what an old paint shop probably helped do to RE.

                  That 2016 is shaping up to be a solid ~100mm self-cash generator is good news. Last year, Musk warned about heavy capex. Now, were holding him to take more of the company’s 25% gross margin directly into free cash flow…because like last year, he says so. It’ll still be reinvested into capex (not RE), and since capex comes out of FCF, before “net FCF”, the net FCF number will likely still be negative.

                  What investors were concerned about was dilutive cap raises, or unfavorable loan terms, when Tesla is telling us 1.2bb in cash and this margin of positive FCF should make that uncessesary. The unit sale projections driving this are helping drive a mini-rally in TSLA.

              3. richard765 says:

                I find it simply amazing how anyone can be so blind. You can toss it in any shape or form, but Tesla has nothing positive going so it can save itself.
                Tesla is a dying company!

                Here is the latest stock price of Tesla. It going down like a rock everyday.

                https://finance.yahoo.com/q?s=tsla

                1. floydboy says:

                  Let me think. Elon Musk and J.B. Straubel or richard765, hmmmm….

              4. floydboy says:

                Bravo Pushmi-Pullyu!

                Absolutely spot on. It all falls to that ancient forgotten wall street paradigm of ‘LONG TERM’ growth.

        2. JakeY says:

          So you are the same guy who keeps trying to define gross margin as inclusive of R&D spending? Point me to an automaker that does that while spending 20% of their revenue on R&D and growing annual sales 50% and perhaps I would agree. Instead automaker R&D peak at about 5% and annual growth at about 10%.

          Tesla R&D spending most definitely isn’t just tweaking existing models and maintaining modest sales growth, so it makes absolutely no sense to count R&D into gross margin. I think you know that perfectly well and just want to count R&D in to make your “no profit” claim.

          1. Nathanael says:

            Yep. Maybe a quarter of current R&D costs for Tesla are “recurring” R&D, max.

            Most of the R&D is honest-to-god one-shot R&D — it should really be capitalized, but Tesla didn’t do the accounting that way.

    3. richard765 says:

      Share soar? What a bunch of BS. Shares are dropping like a rock. Why is there always someone lying about Tesla? Elon Musk fills the public with BS whenever he sees problems and the media eats it up.
      Bob Lutz is right. In now way can this company survive. Hype and BS can only take you so far.

      1. Jay Cole says:

        That’s right. The stock moved up 12% on this news/when the article was written…and held onto most of that into a severely depressed market open. That is the definition of soar.

        Besides that/to your point, this article is about the Q4 earnings specifically, and the initial reaction to those earnings…it is not meant to be an expose of where Tesla has been, or where it is going from this point on. Pretty straight forward.

        I would suggest in the future not using words like “BS” or “lying” if you enjoy commenting at IEV.

    4. richard765 says:

      Shares soar? What a bunch of BS. Shares are dropping like a rock. Why is there always someone lying about Tesla? Elon Musk fills the public with BS whenever he sees problems and the media eats it up.
      Bob Lutz is right. In now way can this company survive. Hype and BS can only take you so far.

      1. ffbj says:

        They also happen to make the two best vehicles in the world bar none. They are without peer in the known universe.

  2. Texas FFE says:

    So the price/earnings ratio is currently ( 144 / -0.87 ) = 166i. We have an imaginary number, there is no price/earnings ratio since there are no positive earnings. What’s really surprising about this is that companies usually give conservative earnings estimates. I bet there going to be some very upset investors, I’m glad I’m not one of them and my sympathy goes out to those that are.

      1. Anon says:

        Yes. Odd that it is capable of sympathy…

        1. floydboy says:

          LOL! Good one Anon!

    1. Kevin says:

      While I support the view that anyone investing in this company which continues to hemorrhage money is foolish, I should point out that dividing by a negative number does not result in an imaginary number. It results in a negative number. The symbol “i” indicates the sqrt(-1).

      What this earnings report showed is yet another in a long history of huge loss, a choice to begin hiding free cash flow, and a completely hyped delivery estimate from a company with a long history of missing timelines and delivery targets.

  3. Alan says:

    I can’t imagine a better time to buy into these shares !

    1. Three Electrics says:

      I can–when we reach the bottom of this bear market.

    2. Texas FFE says:

      Yes, why wait until they are actually making money?

      1. ffbj says:

        I have to laugh, it is so silly. Musk: we will be profitable in Q1 2016, or words to that effect. Report: Tesla loses 87 cents a share. Now I am no Ken Rogoff, but that does seem to be even close to profitable.
        Put it in the strange but true category.

        Perhaps the forward guidance is what is getting so much attention, as analysts now start to raise expectations.

        It is the “Year of the Monkey,” so I have taken that into account in my outlook.
        Very Tricksey!

    3. Texas FFE says:

      Now is your chance, stock price has dropped another 3% since the conference call started.

      1. Alan says:

        And now gone up 14% !

    4. evcarnut says:

      A better time to buy shares was in very the beginning or there abouts 4 to 5 yrs ago? @ $25 a share ,….

      1. Alan says:

        The flaw in that is obvious, we can’t time travel !

  4. Three Electrics says:

    I am curious as to Tesla’s near term plans to raise capital, given that that cash is down to $1.2B and that they aggressive capital expenditure plans. Wisely, they have increased their credit line to $1B.

    1. ffbj says:

      It just happened to work out well for them with the timing and all. Starting a company when money was incredibly cheap. Even then they almost failed. So now 7 years later and money is still cheap.

      Any other questions?

    2. Josh says:

      On the call they said the credit line was only for finished vehicles in delivery. They are using it to support the ramp up of overseas sales.

      I think it was Musk who said it ends up being a 0.1% hit on GM for the vehicles, but it does keep them from needing cash on hand to cover cars in transport.

    3. Tech01x says:

      No plans to raise additional capital in 2016.

      1. Nathanael says:

        Looks like they’re borrowing against all their fixed assets to fund the necessary expansion. OK.

  5. ffbj says:

    What is really funny is I predicted that is exactly what would happen. Ask Jay if you don’t believe me. Anyway for the moment, I was right on, Washington.
    up 13% after hours.

  6. kdawg says:

    “AND deliveries in late 2017”
    ———-
    I don’t see it happening, but I’d love to be wrong.

    1. ffbj says:

      Like they roll a few off the line on Dec 31st.
      So, yeah.

  7. Jean-François says:

    Hey Jay, as a matter of fact, final numbers for Tesla S in Canada in 2015 are 2010 cars! December was a big month!

  8. Three Electrics says:

    80,000-90,000 for 2016 is an odd range, given their current run rate of 64K. It implies Model X deliveries of only 16k to 26k this year, which is 300 to 500 a week. That seems overly conservative. Perhaps they don’t want a repeat of the scare in Q4.

    1. crossie says:

      I think they are (correctly) anticipating a number of model S orders to switch to Model X as they get the delivery timelines down. The retail price isn’t that different, the target markets have a preference for SUVs/Crossovers. Tesla problem is that Model X is so much more complex to build that will impact their production rate.

  9. ModernMarvelFan says:

    “From Tesla’s “core operations” the company said it generated $179 of positive cash flow – a first.”

    Is that $179? $179K? $179 million? $179 is a bit odd or kind of low. =)

    “We anticipate approaching a Model X production rate of 1,000 vehicles a week in Q2.””

    Another thing is that if Tesla delivered about 50K model S in 2015 but the total delivery is only 80K to 90K in 2016 and Model X is about to hit 1000/week in production number, then we got about at least 26 weeks left for the year to add at least 26K Model X to the total number. Combined with couple hundreds per week trickling out between now and end of Q2, you are talking about another 2K to 4K of additional Model X. That would be easily 30K -32K of Model X this year alone…

    If that is the case, then it means that Model S sales isn’t growing nearly as fast as it used to be.

    I just checked the Model S page, If I configure it today, it can be delivered by late March which is less than 2 months that it used to take for Tesla to deliver the car.

    So, is this a result of Tesla “sand bagging” expectation” or “Model X taking away some Model S sales” or “Model S growth slowing down”?

    I think it is a combination of all three. It will be an interesting ride this year for Tesla.

    1. Three Electrics says:

      At beginning of 2014, Tesla predicted 35,000 deliveries. They eventually brought that down to 33,000, and delivered 32,733. At the beginning of last year, they predicted 55,000, then brought it down to 50,000-55,000, then 50,000-52,000. They hit that last range.

    2. Pushmi-Pullyu says:

      ModernMarvelFan said:

      “If that is the case, then it means that Model S sales isn’t growing nearly as fast as it used to be.”

      I think there is little doubt that’s true. Tesla wouldn’t have put the Model X into production if Model S sales growth was still too fast for them to keep up with.

      “I just checked the Model S page, If I configure it today, it can be delivered by late March which is less than 2 months that it used to take for Tesla to deliver the car.”

      All auto makers, including Tesla, experience seasonal variation in the demand for their cars. January and February is the period of lowest demand, so it’s hardly surprising the waiting time from order to delivery is currently significantly below normal.

  10. ffbj says:

    Tesla Happy Dance:

    1. sven says:

      She must have told her plastic surgeon that she wants Ludicrous mode breast implants! 😀

  11. Pushmi-Pullyu says:

    Is it too much to hope that with Tesla’s stock now trending up in price, instead of down, the flood of short-selling anti-Tesla troll posts on InsideEVs will abate?

    I can only hope!

    And I’ll cry crocodile tears for all those TSLA shorters who didn’t exit their position before the earnings report was published.

    Go Tesla!

    1. Three Electrics says:

      TSLA’s current after hours price of 155 brings the stock back to where it was on Monday–two days ago. Thus, I don’t expect many shorts were harmed. I do suspect many of them are availing themselves of the opportunity to take profits, however.

      1. Ocean Railroader says:

        I personally think Tesla stock will settle around and a a hundred dollars a share some time time in the future.

      2. ffbj says:

        Right…

      3. ffbj says:

        Its a short squeeze, dude. Professor Plum in the kitchen with the lead pipe. Its called “Clue”. I suggest you get one.

  12. Ocean Railroader says:

    If they do build 90,000 to 110,000 Tesla cars in 2016. This will have a effect on global oil demand. In that I was reading OPEC is trying to convince Russia and their fellow OPEC members to cut oil production by 5% to try and kill off the oil glut and raise prices.

    1. buu says:

      yeah something like 0,01-0,02% reduction

  13. sven says:

    “If you enjoy your numbers GAAP-style. . .”

    I do. In case anyone is wondering what Tesla’s 4th quarter and full year financial results are under GAAP, here you go:

    “In the fourth quarter, Tesla’s net loss more than doubled to $320 million…. The loss, of $2.44 per share, compared to a loss of 86 cents per share in the same quarter a year ago.”

    “Tesla lost $889 million, or $6.93 per share, for the full year. That compared to a loss of $294 million, or $2.36 per share, in 2014. Palo Alto, California-based Tesla, which was founded in 2003, has never made a full-year profit.”

    http://finance.yahoo.com/news/teslas-4q-net-loss-doubles-231044745.html

    1. Three Electrics says:

      This is where the buyback program really hurts Tesla–by assuming this liability, they really hurt their GAAP numbers.

      I fully expect Tesla to drop their buyback guarantee in 2016. It is almost certain now that they have banks willing to take the other side of their leases.

    2. Well, it aint so bad. Where I work, my employer was somehow able to be 3 Billion $$ short, or spent over earnings, in Q3 alone!!

  14. sven says:

    “Besides logging 17,487 sales (881 of them being leases), Tesla produced 14,037 new vehicles during the quarter.”

    Does this mean that Tesla does indeed have and sell inventory cars?

    1. Three Electrics says:

      Where are CPO sales accounted for? And are cars produced during a prior quarter but delivered during the current quarter count as a sale?

      Tesla counts a billion dollars of inventory on their balance sheet, but I suspect that’s mostly inventory in-transit to customers.

      1. Pushmi-Pullyu says:

        For convenience, we really should number these repetitious anti-Tesla FUD attempts, since they keep getting repeated so often by Tesla trolls.

        Just like every other auto maker, Tesla does not count sales of used cars in with new car sales.

        Duh.

        However, the CPO program certainly is a new and successful income stream for Tesla.

        1. Three Electrics says:

          Here, I was attempting to be helpful an enumerate the possible reasons for the discrepancy. Your post is… less helpful. Please be a good citizen and keep the signal to noise ratio high.

          1. ffbj says:

            Pot says to kettle. So helpful? That’s rich.

          2. Pushmi-Pullyu says:

            Gosh yes, Three Oil Companies Three Electrics, you were trying to be so “helpful” when you posted:

            “This is where the buyback program really hurts Tesla -– by assuming this liability, they really hurt their GAAP numbers.”

            In reality, the Tesla buyback program is part of Tesla’s CPO program, which is a new, positive cash-flow, successful income stream for Tesla. Some of those profits which you anti-Tesla FUDdites keep insisting they’re not making.

            Wikipedia says:

            ~~~~~~~~~~~~~~~~~~~~~~~~~~~
            Internet troll

            In Internet slang, a troll… is a person who sows discord on the Internet by starting arguments or upsetting people, by posting inflammatory, extraneous, or off-topic messages in an online community (such as a newsgroup, forum, chat room, or blog) with the deliberate intent of… disrupting normal on-topic discussion…
            ~~~~~~~~~~~~~~~~~~~~~~~~~~~
            [end quote]

            This is what you’re calling “helpful”.

            1. ModernMarvelFan says:

              ” upsetting people, by posting inflammatory,”

              LOL.

              Just about every “regular” poster here would qualify under that rule alone.

              1. ffbj says:

                Difficult to argue with that.

              2. Pushmi-Pullyu says:

                There is a certain amount of truth to that. But most of us are not trolls; most of us don’t post with the deliberate intent of disrupting useful or on-topic discussion.

                1. PVH says:

                  PP, please do me a favor and try not to call “fudster” anyone not sharing your opinions about Tesla. Your opinions are generally balanced and well appreciated so I know you can do better.

                2. ModernMarvelFan says:

                  Well, I have seen just about every regular poster being “accused” of being trolls…

                  Anyway, I think we can all do better by focusing on the issue/topic rather than calling people trolls.

      2. sven says:

        Yes, cars produced during a prior quarter but delivered during the current quarter are counted as a sale (income is recognized) in the current quarter. In the prior quarter the cost of these completed cars (labor, materials, purchased parts, and overhead) are listed on the balance sheet as finished goods inventory. In the current quarter, the cost of the completed cars which are delivered (sold) are included in the Cost of Goods Sold (COGS). Sales – COGS = gross profit.

      3. Josh says:

        CPO sales are excluded from that sales count (or at least have been every other quarterly report). The difference in the vehicles was due to Tesla producing over their sales and stocking inventory vehicles. They use their “inventory” as showroom vehicles and service loaners.

        These vehicles get a discount based on months in service and miles on the vehicle, but the transaction is as a new vehicle since it hasn’t been titled.

        Same as buying a BMW service loaner vehicle.

    2. Pushmi-Pullyu says:

      sven asked:

      “Does this mean that Tesla does indeed have and sell inventory cars?”

      There’s a confusion in terms here. When other auto makers say “inventory”, they mean cars which have been made but haven’t been bought. Some of those will never be bought as new cars.

      Contrariwise, when Telsa says “inventory”, it primarily means cars in transit to customers — cars which haven’t yet been paid for, because they are usually paid for on delivery* — but also a relatively small number of demo/loaner cars, which will be sold off after a few months as new cars with a slight discount.

      So, the answer to your question is “Yes, but.” Yes, Tesla owns cars which it describes as “inventory”. But they are probably not what you think of when they say “inventory”.

      Bottom line: Tesla sells every car it makes, almost without exception. So far as I know, the only exceptions would be those rare units destroyed during shipping.

      *Some State laws in the USA mandate paying for an item before shipping, so in those cases Tesla is required to collect before delivery.

      1. Three Electrics says:

        Mostly true, but not quite. All demo and service loaners are explicitly for sale. A coworker had to return his loaner early as it was sold out from under him. So, whether you classify these cars as demos which are for sale, or as inventory which is used for other purposes while waiting to be sold, the fact remains that there are a very small number of new Tesla cars, sitting in Tesla lots, that you can buy.

        1. Pushmi-Pullyu says:

          Yes, Tesla counts demo/loaner cars as “inventory”. That’s what I said, altho I suppose I could have said “all demo/loaner cars” to make it harder for you to find ways to perversely misinterpret my remarks.

          Three Oil Companies Three Electrics said:

          “…there are a very small number of new Tesla cars, sitting in Tesla lots, that you can buy.”

          That’s certainly misleading. Tesla doesn’t have dealer lots, because they don’t have dealers.

          If by “Tesla lots” you mean “the parking lots at Tesla service centers, and the mall parking lots where Tesla Stores are located”… then yeah.

          It’s always best for a troll like you to mix some truth in with your lies, isn’t it?

      2. sven says:

        Pushmi-Pullyu said:
        “Contrariwise, when Telsa says “inventory”, it primarily means cars in transit to customers. . .”

        You do realize that Tesla has cars in-transit at the end of the 4th quarter, which offset the cars that were in-transit at the end of the 3rd quarter and sold in the 4th quarter, don’t you?

        In the 4th quarter, Tesla sold 17,487 cars but only produced 14,037 cars for a difference of 3,450 cars. You’re saying that the 3,450 difference is due to Tesla selling cars that were in-transit at the end of the 3rd quarter that are in excess of the cars in-transit at the end of the fourth quarter? Let’s say Tesla only had 3,000 cars in-transit at the end of the 4th quarter. That means that Tesla had 6,450 cars in-transit at the end of the third quarter. That’s three months of production in-transit at the end of the third quarter!!! I say bullsh*t! There is no way Tesla had three months of production in-transit at the end of the third quarter.

        Cars sold in 4th quarter 17,487
        Cars produced in the 4th quarter 14,037
        Less: Estimated cars in-transit @ end of 4th qtr (3,000)
        ——–
        Cars produced in 4th qtr that were sold in 4th qtr 11,037
        ——-
        Cars in-transit @ the end of 3rd qtr & sold in the 4th qtr 6,450
        =======

        1. sven says:

          Damn auto formatting.

          Cars sold in 4th quarter. . . . . . . . . . . . . . . . . . . . 17,487
          Cars produced in the 4th quarter. . . . . . . . . . . . 14,037
          Less: Estimated cars in-transit @ end of 4th qtr. . . . (3,000)
          . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – – –
          Cars produced in 4th qtr that were sold in 4th qtr. . . . . . . 11,037
          . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – – –
          Cars in-transit @ the end of 3rd qtr & sold in the 4th qtr. . . .6,450
          . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . =======

        2. Pushmi-Pullyu says:

          sven said:

          “You’re saying that the 3,450 difference is due to Tesla selling cars that were in-transit at the end of the 3rd quarter that are in excess of the cars in-transit at the end of the fourth quarter?”

          I don’t know about that exact number, nor do I particularly care about getting down into the weeds of the finances. But I can easily believe that could be possible, since it’s no secret that Tesla makes a strong effort at the end of each year to maximize deliveries; to concentrate on making only those cars which it can deliver by the end of the year. Since most of Tesla’s “inventory” cars are ones in transit to the buyer, we should expect the “inventory” to drop noticeably from 3rd quarter to 4th quarter.

          sven, if you really want to understand how Tesla schedules deliveries to maximize quarterly and annual income, you should read the appropriate sections of InsideEVs’ Monthly Plug-in Sales Scorecard, for the Model S and Model X. I’ve found those to be quite enlightening.

          “There is no way Tesla had three months of production in-transit at the end of the third quarter.”

          I agree that’s highly unlikely. Looks like you’ve painted yourself into a logical corner, by piling guess on top of assumption.

          I suggest you try again, with alternate assumptions.

  15. The fanboy sheep will pump up the stock now and create a great new entry for the next short ride. I’ve seen so many companies coming up with giant growth and profits promises and 99% of them failed.

    1. Pushmi-Pullyu says:

      Yes, those companies which failed to produce a compelling product or service at a competitive price, failed.

      Duh.

      So, Mr. Troll, are you gonna try to convince us that Tesla isn’t selling a compelling product? 😀

    2. ffbj says:

      Exactly the opposite of what you said is causing the stock to rise.

  16. Garrity says:

    The most concerning number for me personally is the 80-90k deliveries for 2016. I would like to get a $7,500 credit with my Model 3. Is there some source that shows the total accumulated US sales for Tesla somewhere?

    1. Jay Cole says:

      You can check here:

      InsideEVs Monthly Plug-In Sales Scorecard (All-time EV sales for all models in US)

      Total sales through January: 63,041…give or take. (early 2013 monthly numbers were estimated, but verified within a few hundred units cumulatively)

    2. Pushmi-Pullyu says:

      Discussion of the subject here:

      http://www.teslamotorsclub.com/showthread.php/34201-Expiration-of-7-500-federal-tax-credit-w-Model-3

      Bottom line: Make your reservation early, and hope that any delays getting the Model ≡ into production don’t delay deliveries past the point at which Tesla’s tax credits expire.

      1. ModernMarvelFan says:

        “Make your reservation early, and hope that any delays getting the Model ≡ into production don’t delay deliveries past the point at which Tesla’s tax credits expire.”

        Do you have control of that if Tesla insist on making “signature” editions before the “base” versions for the Model 3 like it does for Model S and X?

        I would imagine that could delay the base Model 3 for many people well past 6-month to 1 years…

        That would really suck though as those who stretch to buy the base model really “need” that incentives.

        1. Pushmi-Pullyu says:

          My sympathies to those who will miss out, but I think if we’re realistic we need to face the near-certainty that most, if not all, Model ≡ buyers will miss out on the $7500 Federal tax credit. But as Andrew pointed out, it doesn’t simply expire all at once; it drops to 1/2, then 1/4, before disappearing completely. So at least some Model ≡ buyers should qualify for at least a partial credit.

          Those who are really optimistic can hope that the U.S. Congress will extend or revise the Federal incentive, letting more Model ≡ buyers take advantage of it. But given the extreme degree of Washington gridlock, I think that’s a pretty forlorn hope.

          1. ModernMarvelFan says:

            I agree that it some portions of it are still there.

            But I know few people who doesn’t have the budget for a high end Model 3 are going to count on both the full incentives and the $35K base price. It would be really disappointing to those people who “actually need it more” in order to buy a Model 3 compared with those “wealthy buyers” who doesn’t flinch whether the fully loaded Model 3 is $60K or $70K…

            As far as incentives go, I agree that I don’t expect much actions out of the Congress or any future Congress. But ideally, it should be changed to a time frame based system so early adopting company such as Tesla, Nissan and GM won’t necessary be hurt by the early investment.

            It would be a basic warning to the rest of the auto industry that if you want too long, you might not get anything either way.

            This way, it won’t “punish” the early investment that those companies made to be the “leaders”. Maybe $7500 until 2018 for all manufacctures and if total PEV sales hit xxx mark for a given year, then it would shrink xx%… That way, the company that build the most EVs would enjoy the most incentives. It would encourage flooding of the EV to the market which is ultimately the goal since once you go EV, it is more likely you stay with EVs…

            Of course, that would be a dream that is very unlikely to happen.

        2. zzzzzzzzzz says:

          Musk told that there will be no signature edition by name. But higher price cars will still be delivered first, as before. Don’t count on full incentives if you will order just base model.

    3. Andrew says:

      In the investors report it shows ~107,000 cumulative Model S deliveries worldwide as of Q42015. Last year they sold ~25,200 cars in the US and that was likely double the year prior, which was double the year prior to that. They’re guiding an 80% increase in sales for calendar 2016.

      Using that, it would imply they’ve delivered about 44,000 Model S cars in the US so far and plan to deliver about 45,000 in the US (S + X) for 2016. Add in Roadsters and they’ll be just under 95,000 deliveries by the end of 2016.

      They’ll probably aim for another 50% growth spurt in calendar 2017 (aside from Model 3). which would put them under 165,000 cumulative US deliveries by the end of 2016. This would imply that the first 35,000 or so Model 3 deliveries will qualify for the full tax credit at which point it will begin to sunset (one quarter after 200,000 gets the full credit, then 50%, then 25%, I think.)

      Hope that helps!

      1. Garrity says:

        Thank you all for the info! Much appreciated.

      1. ModernMarvelFan says:

        How many of that 20-40K will be “founder” or “signature” edition that is loaded and cost way more than the base $35K entry price?

        If Tesla continues to prioritize those editions, the “common people” might not get a chance at those so called $35K price point with $7500 incentives.

        1. Pushmi-Pullyu says:

          That is unfortunate for those of us who, like me, would find it hard to afford a Model ≡. But Tesla is a business, not a charity.

          “Life isn’t fair, it’s just fairer than death, that’s all.” — William Goldman, The Princess Bride

          1. ModernMarvelFan says:

            I don’t expect Tesla to be a charity.

            But EV adoptions need all classes of buyers.

            If European automakers compete with a similar car that doesn’t have SC but are $7500 cheaper (due to incentives), it would certainly move some buyers away from Tesla at the entry price point.

            I don’t think Tesla is being unfair. But I rather think the incentive program is unfair.

            Instead of rewarding based on Per automaker, it need to be rewarding based on total EV sales and time frame. Those automakers like FCA or Toyota who isn’t in a hurry to get onboard, then it doesn’t get any reward for it.

            Those who commits early like Tesla, Nissan and GM won’t get punished. The more you sell per year, the more you get for that year until it reaches certain number for the entire market and then it decreases for everyone at the same time.

            I think we are already past the point of $468.75/kWh (7500/16), so no need to limit it to per automaker.

            1. Pushmi-Pullyu says:

              ModernMarvelFan said:

              “I rather think the incentive program is unfair.

              “Instead of rewarding based on Per automaker, it need to be rewarding based on total EV sales and time frame.”

              I think most of those who post comments to InsideEVs agree that the Federal tax incentive program was set up poorly. Ideally it should be point-of-sale direct rebate, rather than rebate on the year’s income taxes. And ideally, it should be a single pool of money from which all auto makers can draw, which would encourage competition among auto makers to enter the EV market early.

              As it is, with than individual allotments for each auto maker, any of them can wait until later and still get the same financial benefit. Not the best incentive.

        2. ffbj says:

          Most likely true, under current law.

  17. Kdawg says:

    “Of the 50,366 Model S sedans sold in 2015, Tesla detailed that it outsold all of its luxury competitors in the US with 25,202 sales.”
    ——
    Only just beat the Cadillac XTS. And sales were pretty much the same 2014 to 2015 for the XTS.

  18. joeski1 says:

    I love my Tesla S 90D.. can’t beat it.. I no longer support polluting oil companies like Bp that spill oil in our waters and then don’t clean it up..I no longer support greedy oil speculators, greedy middle people, gas stations, I can fill up right at home using my rooftop solar pv.. and I’m having a solar carport built to help offset my electrical use too.. I’ve sold two of my gas burners, and plan to sell another one soon while I still can.. I love the quiet of the Tesla, no emmissions stink, the Tesla app lets me warm and cool the car on command before I even get into it.. it drives like a dream.. and turns heads everywhere I go.. in short.. you folks can argue all you want.. but when it comes to driver feedback.. this driver is 110% satisfied.. Go Tesla!! No compromises.. no regrets!!