TSLA Q3 2018 Earnings

Call Details

• Call Title: Tesla, Inc. Q3 2018 Earnings Call
• Date: October 24, 2018 at 9:30 PM UTC
• Management Team:
  • Sherry Wilson (Managing Director of Investor Relations)
  • Martin Viecha (VP of Investor Relations)
  • Elon Musk (CEO)
  • J.B. Straubel (CTO)
  • Deepak Ahuja (CFO)
  • Stuart Bowers (Head of Autopilot)
  • Pete Bannon (Head of Autopilot Hardware)
  • Andre Karpathy (Director of AI)
  • Madan (Lead Vehicle Safety Engineer)
  • Laura (Head of Factory Safety)

Call Summary

Financial Performance

• Delivered a total of 84,000 vehicles globally in Q3 2018.
• Reported GAAP net income of over $300M for the quarter.
• Increased cash and equivalents by $731M during Q3 2018.
• Model 3 achieved a greater than 20% gross margin in the quarter.
• Energy business posted higher revenues and materially improved profitability, with solar described as possibly the best quarter ever for that business.
• Overall manufacturing costs dropped almost 30% sequentially from Q2 to Q3.
• Exact consolidated revenue for the quarter was not disclosed on the call.

Guidance

• Company expects to produce and sell more Model 3 units in Q4 2018 and expects that trend to continue into Q1 2019.
• Expect to have positive net income and positive cash flow in Q4 2018.
• Aspiration stated to be profitable and cash flow positive for all future quarters, excluding periods where a significant repayment is required.
• Hardware 3 autopilot computer was stated to be on track for readiness by end of Q1 (next year) and to be upgradable in service with a swap taking under 30 minutes.
• Targeted start of Model 3 deliveries to Europe in late February–March timeframe and China production next year, with APAC deliveries possibly in Q2 if not Q1.
• Target set to reduce average factory-to-customer time in North America from ~20 days at quarter-end to under 10 days in Q4 2018; this target was characterized as a goal rather than a firm promise.