Please ensure Javascript is enabled for purposes of website accessibility

Tesla Motors, Inc. Earnings: Sales Growth Accelerates

By Daniel Sparks - Updated Oct 27, 2016 at 3:19PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Tesla updates investors on guidance, the Gigafactory, Model X, Model 3, and Energy Storage. Here are the key points.

After market close on Wednesday, Tesla (TSLA -0.68%) reported better-than-expected first-quarter results. Beyond providing investors an update on the key figures for the quarter, Tesla commented on its progress on other important projects in the company's pipeline, including Tesla Energy, Model X , Model 3, and the Gigafactory.

Model S. Currently, Model S sales make up virtually 100% of Tesla's revenue.

The results
Tesla's first-quarter non-GAAP revenue and EPS were $1.1 billion and a $0.36 loss, ahead of a consensus analyst estimate for $1.04 billion and a $0.50 loss, respectively.

The company's gross profit margin continues to be a strong point. Its automotive non-GAAP and GAAP gross profit margin, excluding zero-emission vehicle credits, or ZEVs, hit 26% and 25%, respectively. Last quarter, Tesla's non-GAAP and GAAP automotive gross profit margins were both 22%. The company's overall GAAP gross profit margin, which includes the benefits of incremental revenue from ZEVs, was 27.7%.

The electric-car maker had already announced quarterly deliveries of about 10,000, up 56% from the year-ago quarter and easily exceeding its guidance for 9,500 deliveries.

Accelerating growth
One of the key takeaways from the results was the level of sales growth Tesla is reporting. The company's revenue and delivery growth rates are actually accelerating.

Tesla's non-GAAP revenue in Q1 was up 55% from the year-ago quarter. This rate is up significantly from the 44% year-over-year growth achieved in Q4.

This accelerating growth is especially clear when examining the company's year-over-year growth rates in vehicle deliveries. The company's 56% year-over-year growth in Model S deliveries is the highest rate achieved since quarters in 2013, the first full year of Model S sales.

Data for chart based on quarterly SEC filings and press releases for quarters shown. Chart source: Author.

For the full year, Tesla maintained its guidance for an expectation for 55,000 vehicle deliveries, up 74% from vehicle deliveries in 2014. Some of these deliveries are expected to be Model X, which Tesla says will launch in late in Q3.

Model X prototype. Image source: Tesla Motors.

A few other important tidbits include:

  • Gigafactory cell and pack production is supposed to begin next year. Up until now, Tesla had only said cell production would begin next year.
  • Demand for Tesla's just-announced energy storage products is robust, or "off the hook," in Musk's words. There are about 38,000 orders for Powerwall and 2,500 for the larger Powerpack, Musk said during the Q1 earnings call.
  • Musk also said he expects Tesla Energy gross margins to be low initially and to be around 20% in the long run.
  • Tesla's guidance for 10,000 to 11,000 Model S deliveries in Q2 puts the company about in line with its plan laid out in Q4 to sell 40% of its expected 55,000 2015 deliveries during the first half of the year.
  • Tesla hopes to show off its Model 3 in March of next year and to begin first deliveries of the model in the second half of 2017.
  • Customers with pre-orders for Model X will finally be able to configure their vehicle specs by July, Musk predicted.

At the time of this writing, shares were up 2% in after hours trading.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tesla, Inc. Stock Quote
Tesla, Inc.
TSLA
$732.10 (-0.68%) $-5.03

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.