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Q4 Shareholder Letter...

Q4 Shareholder Letter...

...is posted:

• $179 million positive core operational cash flow in Q4 2015
• Model S deliveries increased 76% year on year in Q4 2015
• Reaffirming plan for about 60-80% new vehicle sales growth in 2016
• Model S gross margin tracking toward 30% by Q4 2016
• Beginning in March, expecting net cash flow positive for remainder of 2016 with ABL
• Planning for full year 2016 non-GAAP profitability, GAAP profit in Q4 2016
• Model 3 unveiling is March 31st; on schedule for production & deliveries in late 2017

I'd post the link, but don't want to end up in SPAM filter hell

carlk | 10. Februar 2016

No bad news in there. Let's wait for the ER for more info. Shorts get ready to run for cover.

jvs11560 | 10. Februar 2016

reported Q4 EPS of ($0.87), $0.95 worse than the analyst estimate of $0.08

That's not really good news...Just saying

omarsultan.ca.us | 10. Februar 2016

Agree - up $8 after hours so far

Mike83 | 10. Februar 2016

Love it. No pity for the losers(short bs) here. up over $9 after-hours and moving fast.

omarsultan.ca.us | 10. Februar 2016

IIRC they warned on the last call that they were going to have a bump in Q4 expenses related to MX ramp, so its not totally unexpected, but they also did not see the revenue to help offset that--will have to see where folks go with that.

carlk | 10. Februar 2016

It's actually doing pretty well in Europe. I did not expect that.

In Switzerland, Model S outsold the Mercedes Benz S-Class, the BMW 7-
Series, the Porsche Panamera and the Audi A-8 combined for the full
year, and also outsold the Mercedes Benz E-Class. In Germany in Q4,
Model S outsold the Porsche Panamera. Finally, across all of Europe
last year Model S outsold the Audi A8 and A7 combined and the BMW
7-Series and 6-Series combined.

Mike83 | 10. Februar 2016

Up over $16. I smell a short squeeze!!!!!!!

Mike83 | 10. Februar 2016

Model S sales remarkable(up 51%). Outselling Audi, BMW, Jaguar XH, Lexus Mercedes and Porsche(down 13.15.%).

Ankit Mishra | 10. Februar 2016

80000-90000 is the target for this year. X production stable now and will reach 1000 X per week in Q2. 16000 sales in Q1 is target.

Mike83 | 10. Februar 2016

About $1.7billion revenue for the quarter. Appears outside funding not needed. will have to update my PT.
Leaving to listen to conference call.
Congratulations to Tesla.

Ankit Mishra | 10. Februar 2016

New ex Google CFO is cool.

Mathew98 | 10. Februar 2016

Did I mention that @PD's gloom and doom forecast prompted me to double my position before market close on Tuesday?

I smell burning shorts...

Captain_Zap | 10. Februar 2016

I picked up some shares this morning. If there is THAT much FUD out there, me thinks there is opportunity.

Mike83 | 10. Februar 2016

Yes. Jason Wheeler is a great pick. I like him.

Ankit Mishra | 10. Februar 2016

Jason is really taking the charge here, Elon is not stressed by having to answer everything. This looks good.

Mike83 | 10. Februar 2016

I like how Elan discussed the Nevada Gigafacotry hirings and corrected the news media miss-interpretations. He is very diplomatic.

Mike83 | 10. Februar 2016

Tesla in Mexico already. I also think this will be a great market.

carlk | 10. Februar 2016

@Mathew98 @Captain_Zap

Congrates. Parapharasing Warran Buffet when PD fears you should be greedy. I did not buy any though since I own enough and have no plan to acquire more. I haven't sold a single share though.

renwo S alset | 10. Februar 2016

EM better hurry up, or I swear I'm gonna jump.

georgehawley.fl.us | 10. Februar 2016

The spam filter now allows Tesla Motors website URL references

http://ir.teslamotors.com/secfiling.cfm?filingID=1193125-16-457674&CIK=1...

Ankit Mishra | 10. Februar 2016

Its good he is not entertaining excessive interference of people in the business now. he didn't gave any unnecessary details out so that people may hold him against it later on. He is also not revealing the details of Model 3 event. Good.

carlk | 10. Februar 2016

Yes indded. He's been punished by his good deed by being open he learned his lessons. People are not all that innocent when you treat them with good infomation.

Ankit Mishra | 10. Februar 2016

Yes, he shot down people''s attempt to get excessive knowledge and his normal warmth was absent here. It might be because he has lost respect for some people because of the way they have been attacking Tesla when at Tesla they are working days and nights to bring out the best product in the world.

georgehawley.fl.us | 10. Februar 2016

Model ≡ revelations from Elon:

1. Early models will be featured up (think signature reservations). Forget $35K. Think $50K IMO.

2. Weight will be 20% less than MS, implying the need for a battery pack of at least 51 kWh of available energy plus buffer. Think 55-60 kWh IMO.

tes-s | 10. Februar 2016

Am I reading this right - delivering fewer vehicles this quarter than last quarter?

Delivered 17,478 vehicles in Q4 and projecting delivering about 16,000 vehicles in Q1.

Captain_Zap | 10. Februar 2016

Pipeline to overseas customers is filled in Q1 and delivered in Q2, perhaps?

Ankit Mishra | 10. Februar 2016

Yes. But the Q4 numbers were high because Tesla had to compensate for the production line shutdown in the earlier quarters to prepare for Model X. They also slowed down because to make changes for X production. They could have produced more cars in Q3 2015 but they choose not to and hence Q4 numbers were so high. 16000 is pretty cool in my opinion.

jordanrichard | 10. Februar 2016

georgehawley.fl.us, Elon talking about optioned out Model 3s disappointed me. Your numbers are probably on the mark. At the same time he spoke of "loaded" Model 3s coming out first, he expressed frustration over the media pouncing on the $134,000 price tag for a MX. That whole situation which it looks like they will repeat with the Model 3, was their own damn fault. You want to thank/show your appreciation to the early adopters, let them get the first ones off the line, but they don't have to be optioned to the hilt with the associated price tag.
I still have people thinking MSs cost $100,000. I truly believe this does injustice to Tesla, because many people won't even bother looking into a car that they think is way out of their price range.

Tesla wants to sell the Model 3 to the masses, then they need to "advertise" a price in a manner which the masses are conditioned to. Meaning, everyone , upon hearing a price, is used to that being a base price for a bare bones version. So, Tesla coming out with a "Signature" edition of the Model 3 for say $45,000, people are naturally going to be saying,"...hey, what happened to the $35K you have been promising?. I can't afford a $45K car because after options it is going to cost me probably $50K, I am going to buy a Bolt or a Leaf"

Captain_Zap | 10. Februar 2016

@jordanrichard

From what I heard in the conference call, Elon and Co. got that message loud and clear. They are aware and plan to not have the same media mishap about pricing again.
Bring on the Sigs! :-)

Tropopause | 10. Februar 2016

Some media are reporting that incentives will expire for the masses by the time Model 3 Sig and/or Founders are delivered. Leaving the masses to miss out yet again.

I hope Tesla will get this one right.

Chunky Jr. | 10. Februar 2016

I'm sure Tesla learned lots of lessons with Model X in terms of pricing, over engineering/designing, and general PR. They probably got cocky after the success of model S and bit off a bit more than they could chew, but it looks like Model X is better for it in the long run.

mbb | 10. Februar 2016

Maybe I am biased, since Tesla is better in most ways or soon will get there, why anyone will ever want to buy a Mercedes or BMW for the same category?

priustech | 10. Februar 2016

mbb,

The reasons for purchasing a Merc or Beamer are dropping every quarter. They're already getting pushed out of the high end market. Nasty the squeeze will be when the model III is in volume production. I suppose nostalgia. Some people are really loyal to the brands- as in BMW vs Mercedes people.

omarsultan.ca.us | 10. Februar 2016

tes-s: remember they shut down for a week in Q1 so also take that into account

Mathew98 | 10. Februar 2016

Close to half of all high end MB's and BMW's are leases. If the Tesla leasing catch on more than 10% of total sales, then the rest of the premium market better watch out!

NKYTA | 10. Februar 2016

Thanks Big O, and thanks for info, all!

mbb | 10. Februar 2016

Personally I won't be surprised if Tesla captures 50% of the premium market. iPhone of the auto.

TaoJones | 10. Februar 2016

The trigger for the federal tax credit phase-out is 200,000 domestic units sold. Let's be very clear. Once that threshold is reached, the tax credit is reduced, but is not eliminated for, iirc, a few quarters longer.

Now, as a practical matter, given the expected huuuuuuuge (feel the Bern) number of deposits for M3s, getting any federal tax credit is probably not going to be possible unless one has a relatively early number in that lottery (say, one of the first 25,000 or so).

Mathew98 | 10. Februar 2016

Huh? Out of the 107K MS on the road in the past 3 years, about half were sold in the US. There's still about 150K US sales available to claim the full federal $7500 credit. Even if domestic sales are 40K (MS+MX) a year for the next two years, the first 70K M3 will be eligible for the fed credit.

KP in NPT | 10. Februar 2016

+1 JordanRichard. Exactly what I was thinking.

Mike83 | 10. Februar 2016

There is also extra incentives depending on where you live. $13000 in one California area.

carlk | 10. Februar 2016

@jordanrichard I don't think it's a good idea for Tesla to make #35K Bolt like cars. It can and should make a better car than GM does. I don't think I want a Bolt with Tesla badge.

Tropopause | 10. Februar 2016

carlk,

How about a $35k Model 3? I think that's all jordanrichard is asking for from Tesla at launch instead of Sigs and/or Founders driving up the perceived price and driving away prospective customers.

Ankit Mishra | 10. Februar 2016

Nope. Tesla will burn cash. It's a business and it depends on profit. Large amount of people will give money to Tesla just to reserve a place. Plus they will stretch their budget to get the loaded Model 3 because it will be given preference in delivery. It's a business. People are working hard there. It's not strange to expect returns. No one is driving customers away, if they can't pay for loaded 3 just wait. This is how the world works.

JAD | 10. Februar 2016

There is a supply and demand component as well. By 2020 they can probably make 500,000 Model 3's to meet demand, but in 2017, they can only make a few thousand, FAR FAR below demand. Might as well sell them at a premium for the early adopters. Standard selling practice.

I would be amazed if a loaded 3 is ONLY $50k. A decent BMW M3 is $65k+.

carlk | 11. Februar 2016

@Tropopause I was pretty much thinking along the same line as @JAD. It would be fine if Tesla could make a $35K car that is more a BMW beater than a Bolt/Leaf beater but that would be too good to be true. Elon is still stressing it will be a compelling car. A $35K Bolt like car is not. I almost think the base $35K car would not fair much better than the S40 in the past although Telsa still insists it will be in the line up. Don't forget BMW sold about half a million 3 series a year alone. That's already a large enough market for Tesla to take.

dborn @nsw.au | 11. Februar 2016

The BMW is not a car for the masses, at least not in Australia. It is an expensive car. I include the 3 series. Here it needs to compete with the Camry.

jordanrichard | 11. Februar 2016

dborn@nsw.au, here in the U.S., the BMW 3 Series is definitely not a "for the masses" car. The 3 Series is not the top selling car. It is not even in the top 10. I do think there is a little "wealth blindness" going on with Elon, though he is certainly not the only one to suffer from this. The last figures I heard was that the average transaction price of a new car today was about $32,000. However, the problem with that figure like any figures, it is all relative. Since renting a car, I am sorry I meant leasing a car is considered a sale, the sticker price of these optioned out cars has an effect on the average final transaction price.

Now, this could be regional, but here in New England, the typical cars you see on the road are Subarus, Hyundais, Honda's, Toyota, Fords, etc. Yes there are a lot of BMWs and Benzes, but not as many of the cars I mentioned. So in that the avg new car price is $32,000, that does put it in the neighborhood of a BMW 3 Series, hence the comparison. However that $32K is also a well optioned Toyota Camry, Honda Accord, Nissan Maxium etc.

Captain_Zap | 11. Februar 2016

They need the Sigs to come out before the Production cars. That is how they get the line running smoothly during the transition and ramp to the fully automated production cars. They need to automate and tune every option before they flip the switch to full production.

It helps the balance sheet too. It has always been a part of the financial plan. That was mentioned during the call yesterday. Tesla just needs to manage the press releases better at launch time and have all pricing levels in place.

Tropopause | 11. Februar 2016

Captain Zap,

Today Elon tweeted no Sigs.

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