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Tesla First Quarter 2017 Update
•Record vehicle production, deliveries and revenue in Q1
•Model 3 on track for initial production in July
•Completed transition to internally developed Autopilot software
•Q1 Automotive gross margin improved to 27.4% (GAAP) and 27.8% (non-GAAP)
•$4.0 billion of cash on hand heading into Q2
•Q1 GAAP and Non-GAAP loss from operations improved from Q4
We have made a solid start to what should be an exciting 2017. Vehicle production in Q1 increased by 64% compared to a year ago, which enabled us to set new quarterly records of 25,051 deliveries and $2.7 billion in GAAP revenue. Model 3 activities related to vehicle development, manufacturing equipment installation and supplier readiness remain on plan to start production in July. Over the past several months, we have been deploying our internally-developed software into the vehicle fleet, to provide additional safety and convenience features for vehicles with the newest generation of Autopilot hardware. Finally, we have started expanding the number of stores displaying our comprehensive product portfolio of energy generation and storage products for home use.
ADVANCING SUSTAINABLE TRANSPORT
Model 3 vehicle development is nearly complete as we approach the start of production. Release Candidate vehicles, built using production-intent tooling and processes, are being tested to assess fit and finish, to support vehicle software development and to ensure a smooth and predictable homologation process. Road testing is also underway to refine driving dynamics and ensure vehicle durability.
Simultaneously, preparations at our production facilities are on track to support the ramp of Model 3 production to 5,000 vehicles per week at some point in 2017, and to 10,000 vehicles per week at some point in 2018. We recently powered on our newest Schuler press line, and have started the commissioning process. This will allow sufficient time to install and tune die sets ahead of volume production. Paint shop preparation has been completed and installations of our dedicated Model 3 body welding and general assembly lines are progressing well. Equipment installation is also underway for volume manufacturing of cells, modules, battery packs and drive units at Gigafactory 1. We are working closely with all Model 3 suppliers to ensure their readiness ahead of start of production.
As part of our Model 3 launch preparations, we are significantly expanding our infrastructure to support Tesla owners by increasing the density and geographic footprint of our presence. This year, we plan to add nearly 100 retail, delivery and service locations globally, representing an approximately 30% increase in facilities. These additions include the Q1 openings of our first stores in Dubai and South Korea. To significantly improve the customer experience with out-of-warranty body repairs, we intend to open the first Tesla-owned body repair shops later this year and expand the existing network of third-party Tesla certified body shops.
Our new facilities are generally larger than they were in the past. For example, new service locations commonly have many more service bays, and we have tested the implementation of large delivery hubs in Los Angeles, San Francisco, Hong Kong and Beijing. Delivery hubs create an exciting reception for new customers and support much higher delivery levels, so we plan to expand this customer experience to more cities.
We are also taking advantage of our vehicle technology and design to improve service efficiency. Using remote diagnostics, our service technicians are increasingly able to identify repair needs in advance of meeting with customers and even before customers notice issues. This has helped reduce repair times by 35% this year. Our goal is to reduce repair times even further.
The following information was filed by Tesla, Inc. (TSLA) on Wednesday, May 3, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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