Tesla Loses Big Money in 2017: $1.96B

Posted February 08, 2018

The company - founded and headed up by billionaire Elon Musk - saw losses rise to a record US$675.4mln (£487mln) in the three months ended December 31, compared with "just" a US$121.3mln loss a year earlier. But Tesla also importantly said it was still on track with its most recently stated production targets for Model 3 - targets that are still aggressive despite being delayed twice.

The first official Tesla Model 3 electric display cars were unveiled at two locations this month: Stanford Mall in Palo Alto and Westfield Century City Mall.

Despite ongoing production bottlenecks, the electric vehicle 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.

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"We could have done the coast-to-coast drive but it would have required too much specialized code to effectively game it", Musk said on the company's fourth-quarter earnings call Wednesday. The quarter after the Model 3 was introduced, Tesla revealed that it had only delivered some 266 vehicles.

Net orders for the Model S and Model X were close to the all-time high.

Tesla announced that revenues across 2017 rose 55% from 2016 to $11.8 billion. But investors are concerned about the Model 3 because it was supposed to be the mass-market vehicle that could fly quickly off the assembly line and make money for the cash-burning company. Musk has hinted that after the currently-unannounced Model Y is revealed, Tesla will develop a pickup truck. There has been an even bigger increase in solar and Powerwall sales.

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Also in this time, automotive revenue increased by 36% year over year, mainly due to 35% growth in vehicle deliveries. In addition, the cost of servicing with their Mobile Service fleet is significantly lower than from their service centers. Investec Asset Management LTD boosted its stake in Tesla by 78.0% in the third quarter. Jennison Associates LLC grew its stake in Tesla by 17.1% in the fourth quarter. The firm's deployment of 129 MWh of energy storage in South Australia will be recognized in the first based on commercial transfer of the site to the customer.

Tesla's energy generation and storage revenue was up 127% year over year.

2018 will be a transformative year for Tesla, with a high level of operational scaling.

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"With the planned ramp of both Model 3 and our energy storage products, our rate of revenue growth this year is poised to significantly exceed last year's growth rate", Musk added. Tesla expects Model S and Model X deliveries to be about 100,000 in total in 2018, constrained by the supply of cells with the old 18650 form factor. Market capitalization is calculated by multiplying a company's shares outstanding by the current market price of one share. Servicing productivity is expected to improve, predominantly down to what Tesla says is better remote diagnostics built into the Model 3, which could cut physical service visits by half. It's a stance that provokes a lot of debate among experts in the field, many of whom, including former Tesla employees, disagree that full autonomy can be managed with a sensor load out that doesn't include LiDAR. The majority of the spending will be to support increases in production capacity at Gigafactory 1 and Fremont, and for building stores, service centers, and Superchargers.

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