Tesla Q1 results meets expectations, sales up 45% year-on-year

Tesla Q1 results meets expectations, sales up 45% year-on-year

Tesla Motors on Wednesday posted quarterly results that met Wall Street's expectations and gave a bullish outlook for vehicle production on the strength of demand for its upcoming Model 3.

The electric automaker reported a first-quarter loss of 57 cents per share on US$1.6 billion (S$2.17 billion) in revenue. The shortfall was wider than the 36 cents per share reported a year earlier, while sales climbed 45 per cent from the prior-year period.

Analysts expected Tesla to report a loss of 58 cents per share on US$1.6 billion in revenue, according to a Thomson Reuters consensus estimate. The company's shares rose as much as 8 per cent in after-hours trading before retreating slightly.

Despite recent capacity concerns, Tesla said it is "on track" for production and delivery of its Model 3 mass-market car in late 2017. The company moved its 500,000 total unit annual build target up two years to 2018, citing demand for the Model 3. It previously blew away expectations with more than 325,000 reservations for the car.

"The overwhelming demand for Model 3 confirms that compelling all-electric vehicles have mass-market appeal," Tesla said in its shareholder letter.

Tesla reported first-quarter deliveries of 14,810 vehicles, nearly in line with the figure announced in April. It expects second-quarter deliveries of about 17,000 vehicles, below analysts' forecasts for nearly 19,500, according to StreetAccount.

Still, Tesla affirmed its previous guidance for 80,000 to 90,000 deliveries for the full year.

In the company's post-results call, CEO Elon Musk said he expects production of 100,000 to 200,000 Model 3 vehicles in the second half of next year.

But it remains to be seen if Tesla can pay for and complete its bullish production projections for the coming years. In its letter, Tesla said increasing production "will be challenging and will likely require some additional capital."

Stifel analyst James Albertine told CNBC's "Closing Bell" on Wednesday that Tesla has yet to resolve the "execution risk" presented by boosting production.

The plans were further complicated earlier Wednesday as Tesla confirmed Greg Reichow, its vice president of production, will take a leave of absence after it finds a successor. Tesla's vice president of manufacturing, Josh Ensign, is also expected to depart.

It fuels more questions around Tesla as it ramps up production for its flagship Model S, Model X sport utility vehicle and the Model 3. Musk seemed confident about Tesla's manufacturing capabilities despite the personnel losses.

In the call, Musk touted Tesla's "excellent production team." He said the company's Gigafactory allows it to "exceed anybody else in the world at scale economies."

But Vilas Capital's John Thompson, who is short Tesla, told CNBC's "Closing Bell" on Wednesday it will "cost a tremendous amount of money to build plant capacity" to meet those production goals.

For the first quarter, Tesla reported operating expenses of US$417 million, versus estimates of about US$434 million, according to StreetAccount. The metric fell 3 per cent from the previous quarter.

Its non-GAAP gross margin came in at 21.7 per cent in the quarter, beating expectations for 20.6 per cent.

Tesla added it is on track to make the first battery cells at its Gigafactory in the fourth quarter and is "adjusting (its) plans there to accommodate (its) revised build plan."

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