Tesla boosted first quarter 2018 automotive revenue to US$2,735,317,000 from $2,702,195 in Q1 2017. Total revenue, including energy generation and storage and services was $3,408,751,000, up from 2,696,600,000 a year ago.
The company again reported an operating loss – $596,974,000 – but this was down slightly from the Q3 loss of $598,141,000 but way up on Q1 2017's $257,579,000.
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Automotive gross margin rose from 18.9% a year ago to 19.7%.
"Model 3 gross margin remained negative in Q1 due to temporary underutilisation of our manufacturing capacity, which was in line with our expectations," Tesla said.
"In Q1, we produced 24,728 Model S and X and 9,766 Model 3 vehicles, and delivered 21,815 Model S and Model X vehicles and 8,182 Model 3 vehicles, totaling 29,997 deliveries. Short-term operational and logistical issues led to an increase in the number of Model S and Model X vehicles in transit to customers at the end of Q1.
"Model 3 net reservations, including configured orders that had not yet been delivered, continued to exceed 450,000 at the end of Q1 even though fewer than 20 stores worldwide had Model 3 on display. We are planning to deploy significantly more Model 3 vehicles in our stores in Q2 this year."
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By GlobalDataThe Q1 2018 net loss was a record $784,627,000 versus $397,181,000 in Q1 2017.
Tesla said the revenue rise was due to Model 3 deliveries and also a change in accounting standards.
Operating expenses in Q1 2018 increased by 14% compared to Q1 2017, and by less than 2% compared to Q4 2017 to $1.05b despite "significant revenue growth", Tesla said.
The company added: "During Q2, we expect to shut down production for about 10 days, which includes the shutdown we took in April, to address bottlenecks across the lines and increase production to new levels. Our goal is to produce approximately 5,000 Model 3 vehicles per week in about two months. We are in the process of changing the quarterly production pattern of Model S and X vehicles for the various worldwide regions to ensure a more linear flow of deliveries through the quarter. We believe this will provide a better customer experience and reduce the stress on our delivery system.
"Consequently, Model S and X deliveries in Q2 will likely be similar to Q1 but should pick up considerably in Q3 to achieve our goal of 100,000 deliveries for the full year. Our long-term gross margin target of 25% for Model 3 has not changed. In the medium term, we expect to achieve slightly lower margin due to higher labour content in certain areas of manufacturing where we have temporarily dialled back automation, as well as higher material costs from recently imposed tariffs, commodity price increases and a weaker US dollar.
"On the other hand, our average selling price is significantly higher than prior projections, so we expect to achieve higher gross profit per vehicle than we previously estimated."
Reuters reported Tesla investors were unhappy with CEO Elon Musk after he cut off analysts asking about profit potential, sending shares down 5% despite promises the troubled Model 3 was on track.
To achieve profitability, Musk would have to reverse what was a $22,584 pre tax loss per vehicle built.
Reuters said Tesla stock was little changed after the earnings announcement but fell during a conference call when Musk began cutting analysts' questions short, costing Tesla over $2bn in market capitalisation.
"These questions are so dry. They're killing me," Musk said after an analyst asked what percentage of Tesla 3 reservation holders have started to configure options for their cars, an indicator of how much profit Tesla would be able to wring from the vehicles. Another analyst asked about a capital requirement before being cut off.
He then took several questions in a row about plans for a self driving car network and other long term projects from the host of a YouTube channel focused on investing, praising the questions as not boring, the news agency said.
Reuters noted Tesla's capital expenditures had declined in Q1 and the company cut its spending forecasts for 2018, saying it would spend less than $3bn after burning through $3.4bn in 2017.
Investing.com analyst Clement Thibault told Reuters the reduction was noteworthy "but in the long run given challenges that lay ahead of Tesla, I don't think it is going to make or break the company".
Tesla "is definitely not in a minimising cost stage," Thibault added.
Free cash flow, a key metric of financial health, widened to negative $1 billion in the first quarter from negative $277 million in the fourth quarter, excluding costs of systems for its solar business. Analysts had not expected so much spending, predicting hundreds of millions of dollars less in so-called cash burn, according to Thomson Reuters data.
