Published on February 21st, 2013 | by Adam Johnston5
Tesla Motors Expects Small Profit In Q1 Of 2013; Reports $306 Million Revenue In Q4 Of 2012
February 21st, 2013 by Adam Johnston
Green Car Congress notes that Tesla’s 2012 fourth quarter revenues were $306 million, a whopping 500% increase from the third quarter of 2011. The increase in revenue was due to firm demand for the Model S, which won Motor Trend‘s 2013 Car of the Year, with Motor Trend writing, “By any measure, the Tesla Model S is a truly remarkable automobile.”
Solid orders to Toyota from their RAV4 EV program (which uses Tesla technology) provided some further underlying support in the fourth quarter.
Fourth quarter total gross margin’s advanced to 8%, compared to -17% in the third quarter. Tesla attributed much of the increase to higher production in the Model S, as CEO Elon Musk and CFO Deepak Ahuja noted:
Since we are now producing cars at steady state production, we have shifted our focus to cost reduction. As a result, the cost of producing Model S is beginning to decline. Our operations in 2013 are already more efficient compared to Q4, as we continue to stabilize and improve the production process. In addition, further cost reduction efforts undertaken by both us and our suppliers will continue to reduce costs in Q1 and in upcoming quarters. Consequently, we expect gross margin to continue to improve towards our 25% target by year-end.
Overall, 2012 Q4 saw net losses after accounting rules of $90 million (or close to $70 million before accounting rules).
Complete 2012 revenues were $413.3 million, which was double 2011 levels of $204.2. Most of the revenue — $385.7 million — came from automobile sales. 12 million in total development services revenue, thanks to various projects through the Mercedes-Benz B-Class EV program, helped shore up further revenue for the EV car maker. Total net losses in 2012 after accounting rules were $396.2 million, and $344.2 million before.
While Tesla has faced lots of challenges in getting towards the black ink, it looks like it’s finally starting to head in the right direction, thanks to the Model S. For those Tesla haters out there, they should consider the company is fairly new in terms of automobile manufacturers (only in business since 2003). That is only ten years, not a long time to start competing with conventional car companies like GM, Ford, Toyota, and Nissan.
Tesla has the advantage of infrastructure (compared to twenty or thirty years ago) and new technology, which helps make electric vehicles more commercially viable. Web-based technologies, like its recent mobile app for the Model S, are giving more consumers more convenience, thus helping Tesla in the car market.
With 20,000 Model S cars set to hit the market in 2013, it will likely be a big year for the company. Can Tesla keep the upward momentum up? With a loyal support base, I’d say that: expect it to grow even more, driving towards long-term financial sustainability and profit.
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