After market close today, Tesla released its financial results and shareholders letter for the second quarter 2018. The company delivered higher on revenue with a new record of $4 billion. It ended the quarter with a significant loss of $4.22 per share.
As we reported in our preview post, Wall Street was expecting revenue of about $3.142 billion for the quarter and a loss of about $2.71 per share.
We are updating this post with more details from the financial results and shareholders letter.
The market is liking the results so far with TSLA being up about 3% in after-market trading.
The results compare to revenue of ~$3.4 billion and losses of $4.19 per share (GAAP) ($3.35 per share non-GAAP) during the last quarter.
Tesla says that Model 3 gross margin already turned “slightly positive” during the quarter and now it is expecting to achieve a “roughly 15%” gross margin on the vehicle in Q3.
The gross margin will be enabled through a significant production increase to 50-55k Model 3s, according to the automaker.
Despite the big loss this quarter, Tesla still has a sizeable $2.2 billion cash position and it now expects it to grow this quarter with the important production and delivery increases.
Tesla now sees itself as being about to produce vehicles at a rate of 350,000 unit per year, which would make the company sustainable.
The automaker is now on the road to increase production to over 500,000 units per year by ramping up Model 3 production to 10,000 units per week, which Tesla now expects to do with a lot less money.
In the letter to shareholders, the company wrote that it is now guiding almost $1 billion lower in capital expenditure mainly due to the decision to ramp up Model 3 production to 10,000 units per week on the current production lines instead of adding new ones.
Here we will be posting our follow-up posts about the earnings and conference call to expand on the most important points (refresh the page to see the most recent posts):
- Tesla gives Model 3 production update: fixed some bottlenecks, plans new capacity with new lines
- Tesla claims Model 3 outsold all other premium sedans combined in US in July
- Tesla claims to have ‘world’s most advanced computer for autonomous driving’ with Autopilot 3.0 update coming next year
- Here are the top 5 cars Tesla Model 3 buyers are trading in
- Tesla Energy is ‘battery cell starved’ but the growth outlook is ‘crazy’
Here’s the shareholder letter in full: