Last week, Silicon Valley darling Tesla Motors released its rundown of the first quarter. It was widely accepted positively, and while some analysts expressed concerns regarding the company’s cash-burn rate, the EV manufacturer (and now energy sector disruptor) generally outperformed expectations and has remained largely committed to its previous guidance.
We covered the initial news here, but upon reflection, we dug in to look for the factors that really stood out — some of the most crucial elements from the first quarter report. We’ve outlined those 10 things for you below, so read on and find out how Tesla did.
1. Deliveries are on schedule
Tesla is still parading the magical 55,000 deliveries number for the year, after the first three months yielded the results it was hoping for. That will be made up of sales of the Model S and the Model X, despite the latter having not hit the market yet; the company foresees a healthy production ramp as the year continues, helping boost deliveries from the more than 35,000 that it made last year.
2. Model X will be here on time
Well, kind of on time. After a few delays, the Model X is still slated to arrive later in the third quarter; while this still feels far away for Tesla enthusiasts, remember that that’s only next quarter! The Model X is expected boost Tesla’s consumer base as it will include those who like the idea of the Model S but require more real estate on the inside.
3. Tesla Energy demand is ‘off the hook’
One of the big announcements this past quarter was Tesla Energy, and the Powerwall — Tesla’s take-me-off-the-grid approach to stationary, home-based power supply. “The total addressable market size for Tesla Energy products is enormous and much easier to scale globally than vehicle sales,” Tesla said. “We are pursuing product certification in multiple markets simultaneously and plan to ramp deliveries in the US, EU and Australia in Q4.”
4. The Gigafactory should still open on time
The Gigafactory in Nevada, which holds the key to unlocking Tesla’s mass-market production potential, is slated to open for business in 2016. This is incredibly important news, and a fact that seemed glossed over in the initial release; without the factory, Teslas will remain prohibitively expensive, and the $35,000 Model 3 will remain no more than a pipe dream.
5. Model 3 remains tentatively scheduled for 2017
Provided that the Gigafactory stays the course, Tesla should — according to Musk — be able to begin deliveries of its $35,000 BMW 3 Series-fighter in 2017, after a reveal in March of next year. Granted, Musk’s timelines tend to come with your side of salt, but hearing the company reaffirm its commitment to a 2017 delivery date is certainly refreshing.
6. Tesla bought an auto supplier in Michigan
Tesla picked up the Grand Rapids-based Riviera Tool, which makes stamping parts that are then shipped to Tesla’s assembly plant in Fremont. Riviera has about 100 employees who will be retained by Tesla, and the enterprise is expected to be renamed Tesla Tool & Die. It’s the first acquisition for Tesla, and pricing details were not announced.
7. Sales are up, but so are losses
Good news: Sales are remaining strong. Despite concerns that the Model S would lose steam, Tesla has managed to keep the fire alive and people remain lined up to get their hands on the luxury electric sedan. However, as Tesla continues to shovel money in expanding its production capacity and R&D, the cash-burn rate remains high, and the revenue hasn’t been enough to cover its bases.
8. Tesla sold $51 million in ZEVs in the first quarter
This has always been a rather controversial practice by the company, as it adds to the bottom line, but doesn’t add anything material to its business. As an EV manufacturer, Tesla is lauded with zero-emissions credits from the Federal government. Since it has far more than it needs to remain in compliance, Tesla can then turn and sell those credits to companies that need it — think Dodge, Jeep, and others who don’t have the same green cred. Fortunately, at this point, Tesla has managed to show that it has the business it needs and isn’t reliant on the income generated by credit sales.
9. Model S demand remains strong
“We continue to see growing Model S demand,” Tesla said. “In Q1, both North American and European orders were much higher than Q1 last year, despite limited availability of 85D and before the announcement of 70D. While we still have work to do in China, we saw encouraging signs of a return to growth in orders there as well.” This is especially reassuing for those who believe the Model S is getting a bit long in the tooth — despite remaining largely unchanged styling-wise, the car that’s been on the market since 2012 is still managing to show year-on-year growth.
10. Tesla made over 11K cars and delivered more than 10K
Production came in at 10% over guidance estimates, and due to the company’s ability to “[implement] efficiency improvements and reduced labor hours by more than 20% per car by the end of the quarter,” the factory is running smoother and quicker. This will likely have a more material impact down the line, when Tesla is rolling off Model S sedans, Model X SUVs, and Model 3 compacts simultaneously.