Tesla Posts Unexpected Loss In Q4: Misses Delivery Estimates – Only 9,834 Cars Moved

FEB 11 2015 BY JAY COLE 73

Moving Forward, Expectations Only Grow For California-Based Tesla Motors

Moving Forward, Expectations Only Grow For California-Based Tesla Motors

Perhaps no previous quarterly report from Tesla has been more anticipated than today’s.  Did they beat estimates?  Did Tesla hit Model S sales forecasts, but more importantly is the Tesla Model X, Model 3 still on track?  What will the guidance be for 2015?

Tesla Projected They Would Sell Over 11,000 Model S In Q4 2014

Tesla Projected They Would Sell Over 11,000 Model S In Q4 2014

For some of those questions we now have answers.

After the bell on Wednesday Tesla reported a loss of 11 cents per share or $16 million dollars.  The street had been expecting around 30 cents a share on $1.23 billion worth of revenue, to which Tesla logged $1.1 billion.

Margins held at 26.7% for the quarter, while the average transaction price went up with the introduction of the Model S P85D, but not as much as expected given the recent strength of the US dollar.

Of note:  Inside Tesla’s sales of the $1.1 billion, $42 million came via powertrain sales to Daimler in conjunction with the Mercedes-Benz B-Class ED, and also $86 million in regulatory credit revenue, “of which $66 million came from the sale of ZEV credits”


Model S Sales

Tesla Produced On Revenue and Margins

Tesla Produced On Revenue and Margins

During the last quarterly update, full year expectations were ratcheted down by CEO Elon Musk, saying that production (and therefore sales were “constrained by the complexity of launches related to dual motor and autopilot hardware”. 

Tesla pegged full year sales of the Model S at 33,000 units, and with 21,821 already delivered through 3 quarters, that meant Tesla had to have their best quarter ever, selling 11,179 cars to make full year projections.

As it turns out, the 9,834 moved were a significant miss, with the company saying 1,400 delivers “slipped” to Q1.  11,627 were produced in the quarter, achieving 35,000 for the year.

“While we were able to recover the lost production by end of the quarter, delivering those cars was physically impossible due to a combination of customers being on vacation, severe winter weather and shipping problems (with actual ships). As a result, about 1,400 vehicles slipped Decemberand were delivered in Q1.”

Of the 9,834 sales, 647 customers opted to lease – a new high.  Tesla expects that number to stay consistent in Q1.

Total sales for 2014 came in at 31,655, or 4% lower than guidance given last quarter for 33,000 units.  Tesla says that about 55% of these sales were generated in North America, or about 17,400 units.

For those playing the home game, and second-guessing watching our monthly scoreboard, where we estimate Tesla Model S sales based on the data we collect each and every month.  We pegged Tesla at 17,300 units for 2014 in North America.  So +1 to us…back-pats all around! 

We’ll just go ahead and assume that when Tesla says “about 55%” they mean a little under.

Globally, Tesla explained sales as follows:

“The APAC region represented about 15% of our deliveries for the year, and the remaining 30% of deliveries were to Europe, where delivery volume more than doubled from a year ago. Since we remain production constrained, we manage regional deliveries to balance customer wait times globally.”


Outlook for 2015

Tesla slightly increased guidance, depending on your prospective, by saying they expect to deliver 55,000 Model S AND Model X SUVs in 2015, while skewing the mix to 40% for the first half.

  • Q1 deliveries: Tesla guided to 9,500
  • Q2 deliveries: 12,500 (remaining balance of the 40%)
  • H2: 33,000  (which includes Model X)

“First quarter production is expected to be about 10,000 vehicles due to it being a shorter quarter than in Q4 and approximately a week of factory downtime to allow the workforce to rest and tooling upgrades. Cars in transit to Europe and Asia must grow to support those markets, so we plan to deliver approximately 9,500 vehicles in Q1”

Given the large miss on the sales numbers, Tesla returned to giving out a statistic long since abandoned to prove that the shortfall was not a demand issuereservations.

“As a result of this progress, we entered 2015 with over 10,000 orders for Model S and almost 20,000 reservations for Model X.”


On China

Foreshadowing a gloomy report, Reuters broke news that CEO Elon Musk was not-at-all happy with the results in China and sent out an email to managers threatening firings and/or demotions to those not living up to expectations.

The Q4 report was not nearly as dark:

“Despite initial challenges in China, we remain convinced of the vast potential of this market and are concentrating our efforts on the cities we are in currently, before launching into new cities. Our China initiatives include simplifying the buying process there by having Tesla personnel install charging points at customer homes or businesses well before vehicle delivery.

We now offer a turn-by-turn navigation option in China that we provided retroactively through a remote software upgrade to all our customers with appropriately optioned cars, and we believe our new executive seats and second row center console will be quite popular with new China customers.”


The Wait To Lay Eyes On A Production Intent Model X Continues (Above: An early protype was shown this January at CES)

The Wait To Lay Eyes On A Production Intent Model X Continues (Above: An early prototype was shown this January at CES)

Model X

Tesla states that first deliveries are still expected to come in six months time, and that 30 Beta models are now in operation.

The company still however does NOT give out any timelines to actually see their production-intent all-electric SUV anytime soon – other than to note it won’t be happening until at least April.

In March, we will start building and testing a small fleet of Release Candidate Model X vehicles that will be very close to the final production-intent design. Finally, since Model S and Model X will share the same dual motor powertrain, the introduction of All-Wheel Drive Dual Motor Model S helps reduce some of the risk that would otherwise have been associated with the launch and production ramp of Model X.”

Update (from conference call):  In a somewhat bizarre move, Tesla CEO Elon Musk says the Model X will not be shown until deliveries commence due to unannounced features.

On Tesla Supercharging Roll-Out

One area that Tesla is able to control handily in the past is it’s Supercharging network, and it appears its expansion has, and will, continue to grow steadily.

“In Q4, we installed a quarterly record of 125 Supercharger stations, and now have 380 Supercharger stations energized globally.”

High-power wall connectors have also been received well at public and private places of interest/high traffic.

“As an extension of our Supercharger network, hotels and popular destinations have been installing our high-powered wall connectors at such a rapid pace that we are now coordinating these efforts as a Destination Charging program. Almost 900 locations in Asia and North America currently have 1,600 Tesla connectors installed. We plan to expand the Destination Charging program into Europe in Q2 of this year.”


Tesla Model 3

No specific update was given on the report itself…stay tuned for conference call.

Update (conference call):  Indeed the Model 3 was touched on.  The CEO said that the Model 3 won’t have any extreme features, signalling a departure of sorts from pervious expectations.  This lack of extremeness will mean that it can make it to market in the second half of 2017.


Still Of Recent Tesla Gigfactory Video Progress

Still Of Recent Tesla Gigfactory Video Progress

Gigafactory Update

We expect to hear more about the Gigafactory and subsequent Model 3 production this evening during the conference call (which we will also cover directly), but in the meantime Tesla made this statement officially:

“Construction activity is proceeding to plan at our Gigafactory near Reno, Nevada. Significant steel fabrication of the structure started about two months ago. We remain on plan to begin equipment installation later this year and for the start of battery pack production in 2016, in partnership with Panasonic.”

Tesla shares traded lower  by about 3% in early action after the report, and opened close to 9% down.  Check out a real-time quote here.

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73 Comments on "Tesla Posts Unexpected Loss In Q4: Misses Delivery Estimates – Only 9,834 Cars Moved"

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Tesla would never provide the sales break out but how many units were sold as part of the RWD Service vehicle sale & how many units were lost with customers switching to D products.

But make no mistake about it, Teslais in the car business now managing new orders, trade ins and product upgrade cycle.

I hope trade-ins come up during Q&A. Bad trades equal no-sale.

Wow, 50k a year. Seems like just yesterday they were celebrating making 300 per week….


I think amid all Street talk, and the annoying Model X delay (par for the Tesla course), these bigger news were missed.

Tesla made ~50% more Model S in 2014 vs. 2013. And in 2013 they practically came out of nowhere to sell >20k cars.

Now they forecast yet another >50%, very close to the number of Leafs Nissan required 3 factories worldwide and 4 years of stabilization/ramp-up to reach at last year.

I’d say, with the stock dipping now, it becomes again a good one to buy, if you’re into that sort of thing.


Hey look!
They’re almost like all the other car manufacturers now…….lol

Thank goodness they’re not.

Here’s hoping that Tesla -never- starts using the traditional dealership model. Since the dealerships rely on markups and service charges, there is every incentive for them to try to overcharge the customer as much as they can get away with.

The traditional dealership business model is outmoded, and I very much hope Tesla will provide the solution… not become part of the problem.

Yes, Tesla Motors is now the third largest American car producer, since Chrysler passed on to a foreign owner (Fiat). Some states still prohibit selling them, yet allow foreign cars to be sold. What traitors they are!

When Tesla decides to obey the law, they can sell cars.

For the first time I can recall, Tesla gave us an actual number for the backlog:

“over 10,000” outstanding Model S orders
“almost 20,000” Model X reservations

I expect that to go up with some of the information tossed out in the call. Also there are picture of the Model X test mule in camo that just surfaced. I expect there will be a lot of articles on that in the next few days. It looks really good from what you can see.

Model X, the $100K+ for the wives of the Silicon Vallet techies? Hey Elon, you really should’ve made it with a sliding door, but geeks and minivans don’t mix even when the customer base is suburban moms. You’ll regret that one, fella.

so 55k target this year and a week break in Q1 for more retooling (Model X upgrades?). sounds like a pretty solid goal for a company that just did 33k.

If 1400 slipped to Q1, why such the low projection for Q1?

Shorter quarter than Q4 and they gave the employees a week off

1200 * 11 weeks should still mean 13200 produced in Q1. Panasonic gives them enough cells now; so that excuse is out the window. Why aren’t they producing that many if ‘demand is not a problem’ ?

If Panasonic was supplying as many battery cells as Tesla needs, then they wouldn’t be in talks with Samsung.

Let’s be clear: A Tesla spokesman did at one point, early last year, say that battery supply was no longer an issue. But that was followed by Tesla increasing the Fremont factory’s production capacity by 25%.

Tesla is trying to ramp up production by 50% per year over the next few years. Battery supply will almost certainly continue to be a constraint on production at least until the Gigafactory starts producing cells in volume. But if Tesla continues to expand, one Gigafactory won’t be enough.

Demand is still not a problem and that was emphasized again and again in the phone call.

May I ask where you got 1200/week from? I think it’s pretty clear they aren’t going up from 1000/week actual output until Q2.

The end of year goal is for peak production line output, and when the Model X is in full swing. You can’t make any linear interpolations from that.

Their pipeline for overseas deliveries was almost empty… Q1 has one less week, and they are taking their customary 1 week off per quarter which they apparently didn’t do for Q4 last year, there are probably 3 weeks of difference there, or over 3,000 cars.

On a personal note, we like to indulge ourselves just once at this time of year, and I just want to say the site takes a ton of heat/focus on our decision to estimate Model S monthly sales based on the data we accrue (mostly because we have historically been very accurate), but for 2014…

Total sales for the Model S came in at 31,655, of which “about 55%” were generated in North America (or about 17,400) units according to the company.

If one checks our scoreboard, we estimated 17,300 units for the year.

Kudos to both insideevs and ev-sales.blogspot.
Great job indeed!
This also means, Australia deliveries were a drop in the bucket (may be 50).

Congrats to the insideevs team! Looks like Eric’s report last week of 31,623 was almost dead-on:


See Through, you should apologize for trivilizing their work, when you said, “Pretty? yes. Precise? No! Lots of guesswork here. Mostly upwardly guesses.”

I think you owe an apology, not just props. Here’s what you said in the other thread:

“Pretty? yes. Precise? No! Lots of guesswork here. Mostly upwardly guesses.”

Regarding Tesla, here’s another statement of yours from Oct:

“It’s not surprising. They delivered every order they had on their books, even the last minute ones, to meet the quarterly delivery guidance.

Also, it comes at the back of 2 dry monthts. If you take thr quarter as a while, this is still lower than quarters in 2013.

So, yes, Tesla’s run is over.”

LOL. Q3 a record 7785 deliveries. Q4 a record 9834 deliveries. 10k Model S orders on the books and 20k Model X reservations.

Yeah, their run is over…

Well, I’ll give you a well deserved “Thank you!” for your dedication and your hard work.

BTW, Jay: Has InsideEVs ever changed the number on your “Sales Scorecard” for estimated Model S deliveries in a later month? I presume you reconcile the numbers every three months, when Tesla issues its quarterly statement; is adjustment of your estimate ever necessary?

Yes, whenever we are out we make an adjustment (don’t think there has been any this year of any significance, certainly not the last 3 qtrs anyway). That being said the largest adjustment we have ever had to make for a three month period was about 250. Through 10 quarters, our average adjustment is now under 100 units.

I’ll be the first to admit, this is a scary narrow margin of error/track record…and has come not without its fair share of good fortune thrown in.

Jay, do you guys discounts Canadian sales from the U.S. total? Otherwise not only the total, but growth from 2013 and even the monthly/annual ranking could be wrong?

Just to make sure, sorry.

Just in 2014 a total of 847 Model S were sold in Canada, so this adjustment is significant.

We don’t actually break out US specific sales – it just isn’t possible to accurately split the data when we are estimating the numbers within a day or two of the month’s closure. Canada numbers are a very laggy data point.

If you check the scorecard disclaimer we always note that Tesla sales are inclusive of North America proper…so US + Canada.

Do you go back and update the charts?

Jay I remember when you were talking about selling your house before the financial crisis really spiraled in 2008 and moving into a rental. I’ve put a good deal of faith in your “guesses” for some time. Great job again and if you had some stock advice id be pretty interested :). Keep up the good work.

OK, let’s give you a more difficult task. When will the Infiniti EV hit the market.

November 2016 – book it

Hey Jay, can you clarify sales versus deliveries? I’m having trouble reconciling these numbers with the 9,000 number Tesla stated.

Every other manufacturer considers a sale and delivery to be the same thing, does Tesla not do that?

If 9,834 cars were “moved” (according to the story), isn’t that the proper number to compare to all other automaker sales?

Thanks in advance!

Sigh, reading comprehension helps. Nevermind. 🙂

Also, was the street expecting a gain of 30 cents per share versus the 11 cent loss reported? It wasn’t clear to me if analysts expected a 30 cent gain or loss.

Street expected a gain of 30 cents

Thanks Jay!

From the SEC quarterly report:

“We built 11,627 vehicles in Q4, thus achieving our production target of 35,000 Model S vehicles in 2014. This required a herculean effort, because we held back release of our Performance All-Wheel Drive Dual Motor car (P85D) to ensure it would be a truly great experience for owners.

While we were able to recover the lost
production by end of the quarter, delivering those cars was physically impossible due to a
combination of customers being on vacation,
severe winter weather and shipping problems
(with actual ships). As a result, about 1,400
vehicles slipped December and were delivered in Q1.”

OK. Every company has outlier quarters. If Q1 ends up being a huge lunker of a quarter, and the two average out, then no problem. We’ll see.

Not every company misses their quarter by 41 cents a share. That wasn’t a blip, it was a train wreck. Goodbye, Elon. Go work on your spaceship, son. The adults will be making the EVs from now on.

This is my theory…

At the beginning of the quarter, the 85D and P85D models were announced. At that point, many/most customers cancelled or delayed their orders in favor of the D models, most of which could not ship during the quarter.

Nutshell … this quarter was small because next quarter will be big.

Well, this is what happens when you try to grow a company’s production by 50% every year. Speed bumps occur.

I am enthusiastic about Tesla, but I’m losing a bit of my respect for them because of all the excuses. Customers on vacation in December? Bad weather delaying overseas shipping during late fall and winter? These are expected circumstances. They happen every year.

Tesla should just man up and admit they’re having growing pains.

Except they did make their production goal.

That depends on how you look at it. If they didn’t meet their production early in the quarter, then tried to make up for it with a late rush that was too late to deliver (by the end of the quarter) what they produced, then it may be accurate to say they made the -quarterly- production goal, but they missed their -monthly- production goals for October and November.

Not bad weather. A work stoppage at west coast ports. There are ships pilled up all over the puget sound waiting to unload. It has gotten so bad Toyota and Honda are air freighting in some parts to their NA manufacturing facilities.

Well if that’s true, then that’s a legitimate reason, so it seems odd they didn’t mention that. Blaming bad weather, at that time of year — which should be expected — is just an excuse.

If it’s true? It’s been all over the news for months. Citrus farmers with their crops rotting in containers, work slowdowns, port closings, ongoing negotiations…etc…Of all the Tesla reasons for not meeting projections that one has the most evidence of being correct.
If the stock falls enough, perhaps below $180 then it would a buy in my book. On a side note.

I think it was mentioned about the port problems, not in so many words though.

“and shipping problems (with actual ships).”

Could be a subtle acknowledgment of the problems at the port.

They are saying that if normal operations resumed today, it would take till next year to clean it all up.

Cue the comment section:

haters’s bashing vs. supporter’s rebuttal…

At least we’re not still arguing over whether the Model S is “vaporware” or not….

ah! The good ol’ days!

C’mon. Not so bad.

1,400, mostly P85Ds, slipping into Q1, mostly all at >30% gross margins, can kill an expectation. That said, this quarter appears more on track than last (where they gave up on the 35k target, for 33k).

RE: Model X I didn’t take the wording to suggest any further delay, at least, to a possible 1st half reveal, and Q4 deliveries.

Cool blurb:
“We plan to grow SC network..by over 50% this year…”

Not so cool blurb, IMO:
“Starting in 2015, we plan to reorganize income …rev and gross margin (to) reflect..new car sales, including regulatory credits”. I think those reg credits are going to distort industry comparisons. The report states they were worth 4%, in Q4 (26-22%).

Seems like a balanced commentary here. We’ll know the EV market has matured when blind loyalty takes over like Chevy vs. Ford vs. Dodge.


True. But it is more like Tesla against the world, right now…

I don’t care about the short term news either way as long as they can get that Model 3 out so I can buy one… But that is looking very doubtful in terms of release dates now…

The Model 3 will arrive in a far more competitive environment. The existing players have been happy to let Tesla take the risks to prove the concept, and now they’re getting ready to swoop in and take the market. Tesla doesn’t stand a chance against a longer-range LEAF, and the Bolt that will beat the Model 3 to market.

Tesla will go the way of Segway.

Other thoughts: 1. Tesla guided down the 60K+ expectation for 2015 deliveries to 55K. Between cultural (?) difficulties in China, economic difficulties in Europe and saturation in the US, I believe that they’ve guided this down for 2015 and will grow another 70% in 2016 (to about 90K cars), and they will need to release the Model 3 early in 2017 in order to keep this growth rate alive through 2017. Otherwise we might see a few years of ~10% growth. If the Model 3 doesn’t ship until 2018 or later, it will defer capital improvements at the Tesla factory in Fremont (and ease up on Tesla’s finances) because it can already run at 100K units/yr (2000/wk), which they may not exceed on the Model S/X line for a while. 2. Tesla is deferring some revenue from each car pending the autopilot update. This means Tesla made more money than they said they did, but cant recognize that revenue until they ship the more advanced autopilot features. They are shipping some features this year, but the letter didn’t sound like it was coming soon (next 6 months). Maybe with the debut of the Model X in the fall. 3. With… Read more »

Where do you get “saturation of the US market”, stop pulling your imaginary quotes out of your ass.

“Saturation” maybe not but “approaching saturation” is probably not far from the truth at current level of prices for Teslas. Air is thin up there.

The Model S is long in the tooth. The uber-performance version won’t matter. Hot cars last a couple years, and then they go away.

Tesla is cruising along. I think they have had some hiccups though.

The many Model X delays are a bit embarrassing and off-putting. And I think the Falcon-Wing doors took them too close to the sun and caused problems. I suspect the doors are much of the reason for the delays AND I think the doors are going raise costs for the car which would have been cheaper and completed earlier if they had just gone with traditional doors.

Yes, I believe Tesla is a bit quick to despise traditional car makers. If sale volumes and eventually reporting profits do matter to them they should start with some (unusual) humility to aknowledge that some technical options are just too complicated, expensive, inefficient and unnecessary (falcon doors). Maybe many of Tesla’s engineers do share secretely this opinion.

I think many of us were expecting a soft miss on these numbers today, especially with Elon et al walking back some statements they’d made in the past, and the hullabaloo over China.

I was personally a little irritated that they dropped the S60D option. Teslas are getting increasingly expensive… instead of cheaper. The Model X will worsen this trend.

However, I’m more than willing to give them the benefit of the doubt, because as Elon acknowledged, “making cars is hard”

in the end, Tesla’s valuation is 99% based on the Model 3. The Model S and Model X will get us to the Model 3 (in theory anyway).

More importantly, the Model 3 is helping bring us the Chevy Bolt and 200 mile Nissan Leaf.

All companies go through rough patches. Lets hope Tesla can navigate through.

JRMW said:

“All companies go through rough patches. Lets hope Tesla can navigate through.”

Well said. This rough patch is still smooth sailing compared to the early days of Tesla Motors, when the Roadster was delayed three times, two attempts to develop a two-speed transmission failed, costs ran wildly out of control, and the original founders were pushed out of the company, followed by Musk firing 10% of Tesla employees.

In the long run, I doubt missing last quarter’s guidance will have a serious impact on the company’s future.

The problems Tesla is having in China, though — that situation -does- appear to be having a serious impact on Tesla’s ability to grow.

I think that’s true. A momentary bobble is not going to derail them long term, but China is a long term problem, though it is still very early in the game I do not foresee them batting a century there. Bit o’ a sticky wicket, hey what?

Looks like the stock is down 4% to $204.13 in after hours. Still higher than it was most of January.

Now $195. Bigger drop than I expected.

Interesting note from the call: Elon says the initial version of the Model 3 will be more conservative and not as crazy at the Model X, so it can stay on track for Model 3 delivery H2 2017. After the initial Model 3 is launched, the more “ambitious” car will come along later.

Is that what they meant when they said “The CEO said that the Model 3 won’t have any extreme features…”

They’re going to piss off a lot of early buyers if they sell an “expensive corolla” in 2017 and then sell a “refined 3-series bimmer” a year or two later. I think I may wait a couple years after then Model 3 release if that’s the case.

I wonder when they’ll quit calling him Elon and start calling him Musk? At $150, maybe?

Ok market punish Tesla and drop stock price below $100 because I want to BUY, BUY, BUY.


Much props to InsideEVs for the estimated Tesla sales! You guys killed it. Autoblog had 29,000, you guys were right on the button with 17,300. That self-back-patting is well deserved.

The Tesla sales will diminish unless they are able to come up with a new and better car every year. It is like they say, this is equivalent to buying an Apple product. I wonder if they will make their charging cables on the old cars obsolete in order to have people buy the new and improved car like Apple does. I wonder how they appraise trade ins. I guess one can only trade in an old Tesla for a new one. What happens with the old Teslas when they start having problems? They don’t have dealers and you can’t take it to the corner gas station for repairs. I guess you just trade it in for a new one. Have car dealers from other brands been taking Teslas in on trade?

Tesla is a computer merchant, not a car company, with an ignorant shareholder base to match. But it won’t be ignorant for long. They’ll learn just how hard it is to make cars, and just how much liability remains even after they’re shipped.

Anyone who thinks China will be a significant long-term market for Tesla is whistling past the graveyard. They’ll make their own EVs, or buy ’em from the Germans, who are much better car makers than Tesla will ever be.