As it eyes higher volume and hitting profitability with the Model 3, Tesla’s latest results put it firmly in loss-making territory, though with an underlying improving trend and some details that cheered investors.
In the second quarter the company made a loss of US$336m (compares with US$293m Q2 last year; US$330m loss in Q1) on revenues of $2.8bn (last year’s Q2 revenue, US$1bn). The net loss was lower than analysts had forecast.
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Tesla said that Model 3 production is ‘on track to achieve previously announced targets’ and that it is expecting positive Model 3 gross margin in Q4.
Tesla also reported that deliveries grew 53% compared to Q2’16 and that it is projecting Model S and Model X deliveries to increase in the second half over the first half. Strong sales for those two models in the quarter will go some way to allay investor concerns over possible cannibalisation of higher margin models by the upcoming Model 3. Tesla said it is seeing a further increase in Model S orders recently.
Tesla said that during Q2, its engineering, manufacturing and supply chain teams were focused on the final stages of Model 3 product development and building the “machine-that-makes-the-machine” for the start of production.
Tesla said it produced 25,708 vehicles in Q2, 40% more cars than in the same period a year ago, despite a production shortfall of 100 kWh battery packs through early June. During Q2, Tesla said it added more Model X cars to its test drive and display fleet because ‘our stores had been operating with far less than what was needed and, in some cases, none at all’. In addition, it increased its service loaner fleet with fully loaded cars ‘to provide the best customer experience’. It said ‘this additional visibility was likely a factor in helping Model X net orders in Q2, which grew by over 20% both sequentially and as compared to Q2 2016.’
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By GlobalDataTesla delivered 22,026 Model S and Model X vehicles in Q2, for a total of 47,077 in the first half of the year. Model S and Model X combined deliveries in Q2 grew almost 53% globally versus the prior year.
