Tesla missed the street in its reported Q3 earnings today, including non-GAAP revenue of $1.24 billion and non-GAAP loss per share of $0.58. Analysts expected a non-GAAP loss per share of $0.50. The company’s non-GAAP revenue also missed analyst estimates of $1.26 billion.
But the real story here is on the amount of cars delivered this year.
Tesla produced a total of 13,091 and delivered 11,603 cars in Q3 2015. The company originally planned to sell 50,000 to 55,000 cars this year, which would be a 70 percent increase in cars sold in 2014. However, that estimate was lowered after Tesla reported its preliminary Q3 delivery figure of 11,580, just above guidance.
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Hoping to make up for the miss, Tesla guidance is for 17,000 to 19,000 car deliveries in Q4 2015. The biggest constraint here would be for Model X production. The supply of components for the Model X has been a big factor in production, according to Tesla. The company will bring production of certain components in-house going forward.
In a letter to shareholders, the company said production of Model X vehicles should improve “sequentially” under this plan.
We expect our average vehicle sales price to increase slightly in Q4 with more deliveries of highly optioned Model X vehicles. We expect Q4 Model S gross margin to improve sequentially, but initial Model X launch expenses and higher overhead and depreciation allocations will temporarily elevate total production costs in Q4. As a result, we expect non-GAAP Automotive gross margin to decline slightly from Q3. After Model X production stabilizes in Q1 2016, we expect Model X gross margin to improve rapidly and become comparable to Model S gross margin over the next several quarters, even as we launch a lower priced version of Model X with a smaller battery pack during 2016
In regular trading, the stock was down by 2.54 percent, closing at $208.35. It was up by 7.27 percent in after-hours trading.
Tesla stock was at an all-time high of $291.42 in September 2014, but began to decelerate from there to $185 in March of this year. It started picking up steam again this May, but the stock took a tumble again last month after Consumer Report pulled its recommendation, citing new information on the car’s reliability.
Some other interesting news gleaned from today’s Q3 2015 report has to do with Tesla’s plan to invest $500 million in Q4 – much of that investment will go toward speeding up production in Tesla’s Gigafactory to keep pace with the plan for Model X production.
Disclosure: Author owns a few shares in Tesla.