UPDATE: Tesla Motors, Inc. (TSLA) Posts Q4 Loss of 65c/Share

February 20, 2013 4:02 PM EST
(Updated - February 20, 2013 4:27 PM EST)

Tesla Motors, Inc. (NASDAQ: TSLA) reported Q4 EPS of ($0.65), $0.12 worse than the analyst estimate of ($0.53). Revenue for the quarter came in at $306 million versus the consensus estimate of $298.9 million.

From the investor letter:
Our most significant achievement in Q4 was the successful ramp of production volume to more than 400 vehicles per week for three consecutive weeks in December, and this has continued at a consistent rate in Q1. This has established a production level that will allow us to achieve our goal of 20,000 Model S deliveries in 2013. We produced over 2,750 vehicles during the quarter and more than 3,100 vehicles during the full year, while maintaining our stringent quality standards.

New reservation activity once again hit record levels during the quarter driven by holiday traffic to our stores, multiple Car-of-the-Year awards, the start of European marketing, and visibility of customer cars on the road and related word-of-mouth enthusiasm. As a result, we added more than 6,000 new reservations in Q4, up from almost 2,900 in Q3.

Outlook for 2013.
We plan to deliver about 20,000 Model S units in 2013. We expect to start the year with about 4,500 deliveries in Q1, as we gave the manufacturing team the first week of the year off to celebrate their accomplishments during 2012. We plan to start European deliveries of the Model S this summer and Asian deliveries later this year. We have now started delivering Model S with the 60 kWh battery pack. These cars have an EPA-rated range of 208 miles on a single charge. Delivery of cars with the 40 kWh battery pack is expected to begin later this summer.

As we enter 2013, production efficiency is improving substantially as labor inputs decline and initial end-of-line production quality improves. We expect first quarter material, labor and overhead costs to be substantially lower than in the fourth quarter of 2012, and for this trend to continue in 2013.

As a result of these actions and the favorable impact of regulatory credits, Q1 gross margin is projected to improve to the mid-teens percentage range. We expect our gross margin to continue to rise into the second half of the year to our target of 25%, despite a much lower contribution from regulatory credits.

In the first quarter of 2013, we expect to generate slightly positive net income, on a non-GAAP basis. We also expect to be near breakeven on cash flow from operations. These targets would be achieved through a combination of improved gross margin and lower R&D expenses. The achievement of operational and manufacturing efficiencies will drive some adjustments in our personnel, primarily affecting contractor and temporary employees. At the same time, we are continuing to hire and convert to full time key talent where required.

For the full investor letter, click here.

For earnings history and earnings-related data on Tesla Motors, Inc. (TSLA) click here.

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