Electric car maker Tesla has notched up its biggest ever quarterly loss of $675.4m, compared with $121.3m a year earlier, but it said revenues rose to $3.29bn, up from $2.28bn.
Tesla’s biggest-ever quarterly loss, however, was not as wide as analysts were expecting, and revenue also just topped targets.
And Tesla CEO Elon Musk said the company would turn a profit during 2018.
“At some point in 2018, we expect to begin generating positive quarterly operating income on a sustained basis, operating 5,000 a week of Model 3 production,” he said. “I’m cautiously optimistic that we will actually be GAAP profitable with no asterisk.”
He also maintained his goal to produce 1 million vehicles annually by 2020, with plans to make capital investments related to the Model Y SUV towards the end of this year.
Despite ongoing production bottlenecks, the electric car maker said it would continue to target Model 3 production rates of 2,500 by the end of the first quarter this year, and 5,000 by the end of the second quarter.
“As we shared previously, in order to incorporate our learnings and be capital efficient, we intend to start adding enough capacity to get to a 10,000 unit weekly rate for Model 3 once we have first hit the 5,000 per week milestone,” Tesla said in its investor letter.
In Q4, Tesla delivered 28,425 Model S and Model X vehicles and 1,542 Model 3 vehicles, totaling 29,967 deliveries. Combined Model S and Model X deliveries in Q4 grew 10% globally compared to company’s prior record in Q3, and they grew 28% compared to Q4 2016. The Q4 production of Model S and Model X during the quarter was limited to 22,137 vehicles due to reallocation of some of the manufacturing resources to Model 3 production.
Combined Model S and Model X net orders in Q4 were just shy of Q3’s all-time high. Importantly, combined orders for Model S and Model X grew significantly in 2017 compared to 2016. There had initially been concerns about whether Model 3 would cannibalize Model S and Model X. It seems the opposite is true. In stores where Model 3 is on display, customer foot traffic has increased considerably and orders for Model S and Model X have in fact increased. There has been an even bigger increase in solar and Powerwall sales.
Tesla spent $787 million in capital expenditures in the Q4, below its projections, but said capital spending in 2018 would be “slightly more” than in 2017 due to expanded production at its Fremont factory and Nevada Gigafactory. Tesla burned through $3.4 billion last year.
During Q4, Tesla opened 12 new store and service locations resulting in 330 total locations worldwide at the end of the year. Service capacity more than doubled in 2017, partially due to new locations, but also through a 50% increase in productivity of existing service locations, as well as the significant expansion of the Mobile Service fleet, which now has 230 vehicles.
The Supercharger network has seen the most significant growth yet. In 2017, 338 new locations opened for a total of 1,128 Supercharger stations globally. In preparation for Model 3, Tesla opened several large Supercharger stations along the most popular corridors, including between Los Angeles and San Francisco and between Los Angeles and Las Vegas.
The unveiling of Tesla Semi on November 16 launched Tesla into a new product category that will have a transformative impact due to a total cost of ownership that is superior to diesel trucks. Tesla Semi combines a real-world range of up to 500 miles with unprecedented performance while pulling a standard payload. Its distinctive torque enables smooth acceleration to highway speed even when fully loaded with cargo. Moreover, it has been designed to dramatically improve safety not only for the driver and cargo, but also for pedestrians and other cars on the road.
Tesla will be the first Semi customer. The plan to use the Tesla Semi for its own logistics by transporting Model 3 components from Gigafactory 1 to Fremont.
Also, after developing it in stealth with a very small team, Tesla surprised everyone with the next-generation Roadster. Roadster was at the genesis of Tesla, a car that proved electric vehicles can be fast, exciting and here to stay. The new Roadster takes this concept to the next level. With 0-60 mph acceleration of 1.9 seconds and maximum speed of more than 250 mph, it will be the fastest car in the world. When that performance is combined with its 620 miles (1,000 km) of range, this supercar puts to rest any debate about the limitations of electric vehicles.
