5 Takeaways From Tesla’s First Earnings Statement of 2016
When Tesla announces its quarterly earnings, everyone with the slightest interest in cars, investing, and environmental causes seems to be listening in on the call. The automaker’s report on the fourth quarter of 2015 was no different. Now that the dust has settled and investors have had a few days to settle scores on Wall Street, there are several things worth noting about the electric car company’s present and future. Here are five big takeaways from Tesla’s first earnings report of 2016.
1. Tesla Motors is still not profitable
Maybe the first thing to know about Tesla is the EV maker has not turned in a profitable year yet. The fourth-quarter, non-GAAP losses were $0.87 per share, a figure that was more than nine times the estimate from analysts ($0.09). To date, Tesla has only posted one quarter where it showed a profit. The earnings statement said 2016 would be the year where that streak changes, but for now the company is not making more than it spends.
2. There is a new, ambitious production goal
To reach profitability and continue growing the company, Tesla plans to launch into an unprecedented rate of production. The earnings statement pegged the 2016 totals between 80,000 and 90,000 deliveries between the Model S and Model X. These figures were higher than analysts expected from the company and represent a huge (over 60%) jump from the 50,580 cars delivered last year. To get there, Tesla said it would deliver 16,000 models by the end of March. That’s another quote that was higher than what analysts expected.
3. Model 3 will indeed cost $35,000
Though there wasn’t a great deal of discussion surrounding the next electric car Tesla will produce, but the available details were important, beginning with pricing. Company officials confirmed the Model 3 would debut with an MSRP of $35,000, which opens the door for a very friendly sticker price wherever there are state incentives available on top of the $7,500 tax credit (or what’s left of them). CEO Elon Musk added on Twitter that reservations of $1,000 would be taken immediately after the first reveal, planned for March 31.
4. Model 3 production set for 2017
Tesla has been called out for production delays by consumers and investors alike, but the EV maker confirmed it will deliver the first Model 3 sedans in late 2017. During the conference call with analysts, Musk noted that the first batch will go to customers who choose the most options, though there will be no Signature Series for this one. (Nor will there be deposit amounts greater than $1,000.) Going by this system, those who are looking something close to the base Model 3 will be waiting until 2018.
5. Investors have both hope and fear
In another week of volatility for Tesla stock, the result ($151.04) was a net loss from the start of trading the previous Monday ($156.85). Along the way, there was a dip below $144 and a rise above $159 following the earnings call. Friday alone saw nearly 10% fluctuations before evening out by the closing bell. Investors who choose to see the long-term, mostly positive picture with accelerated deliveries are convinced about Tesla. Those in the show-me-now camp reserve their right to be pessimistic and are trading accordingly.