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Tesla Fourth Quarter & Full Year 2017 Update
• Record Model S and Model X deliveries in Q4 2017
• Cash balance of $3.4B entering Q1 2018
• 2017 revenue of $11.8B, up 55% y-o-y from organic growth
• 2018 revenue growth expected to significantly exceed 2017 growth
• Continuing to target Model 3 production rate of 5,000/wk by Q2 end
2017 was an important year in Tesla’s history. Among other things, we started delivering Model 3 to customers, unveiled the Semi and the next-generation Roadster, installed the world’s largest battery in Australia, and had record vehicle production and deliveries of Model S and Model X. We also learned many lessons from the slower than planned production ramp of Model 3. All of this sets the stage for 2018 to be a transformative year for us.
At some point in 2018, we expect to begin generating positive quarterly operating income on a sustained basis. With the planned ramp of both Model 3 and our energy storage products, our rate of revenue growth this year is poised to significantly exceed last year’s growth rate. The launch of Model 3 is what Tesla had been building towards from day one. We incorporated all the learnings from the development and production of Roadster, Model S, and Model X to create the world’s first mass market electric vehicle that is priced on par with its gasoline-powered equivalents – even without incentives. Now we are ramping up production significantly, and as we look ahead in 2018, we are on the cusp of a step change in the world’s transition to sustainability.
ADVANCING SUSTAINABLE TRANSPORT
We continue to target weekly Model 3 production rates of 2,500 by the end of Q1 and 5,000 by the end of Q2. It is important to note that while these are the levels we are focused on hitting and we have plans in place to achieve them, our prior experience on the Model 3 ramp has demonstrated the difficulty of accurately forecasting specific production rates at specific points in time. What we can say with confidence is that we are taking many actions to systematically address bottlenecks and add capacity in places like the battery module line where we have experienced constraints, and these actions should result in our production rate significantly increasing during the rest of Q1 and through Q2.
Our goal is to become the best manufacturer in the automotive industry, and having cutting edge robotic expertise in-house is at the core of that goal. Our recent acquisitions of advanced automation companies have added to our talent base and are helping us increase Model 3 production rates more effectively. We don’t want to simply replicate what we have built previously while designing additional capacity. We want to continuously push the boundaries of mass manufacturing.
As we shared previously, in order to incorporate our learnings and be capital efficient, we intend to start adding enough capacity to get to a 10,000 unit weekly rate for Model 3 once we have first hit the 5,000 per week milestone.
Despite the delays that we experienced in our production ramp, Model 3 net reservations remained stable in Q4. In recent weeks, they have continued to grow as Model 3 has arrived in select Tesla stores and received numerous positive reviews, including Automobile Magazine’s 2018 Design of the Year award. We want to thank both our Model 3 suppliers and our customers, who have continued to be such great partners and advocates, while patiently waiting as the ramp continues to accelerate.
In Q4, we delivered 28,425 Model S and Model X vehicles and 1,542 Model 3 vehicles, totaling 29,967 deliveries. Combined Model S and Model X deliveries in Q4 grew 10% globally compared to our prior record in Q3, and they grew 28% compared to Q4 2016. As we indicated heading into Q4, production of Model S and Model X during the quarter was limited to 22,137 vehicles due to reallocation of some of the manufacturing resources to Model 3 production. This enabled us to reduce our finished-goods inventory to the lowest level in about 18 months.
The following information was filed by Tesla, Inc. (TSLA) on Wednesday, February 7, 2018 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-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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