Tesla chief Elon Musk. Image: wikimedia user: corevette.
Tesla reported losses of around US$0.36 per share in its quarterly earnings announcement yesterday, despite a flurry of activity around its stationary storage launch last week – yet the company still outperformed the expectations of the investment community.
In the wake of the announcement of its stationary storage products, CEO Elon Musk said the new Gigafactory could "easily" serve that burgeoning market alone.
Non-adjusted revenues for the quarter stood at US$1.1 billion, at US$940 after adjustment for GAAP (generally accepted accounting principles). Unsurprisingly, US$1.06 billion of non-adjusted and US$893.3 million of adjusted income came from Tesla’s automotive business.
One consultancy, Baird Equity Research, said Tesla had beaten its revenue estimates of US$947.9 million and US$1.04 billion for adjusted and non-adjusted revenues respectively, while the EV/storage maker’s gross margins, at 28.2%, was an improvement on Baird’s expected 25% margin.
However, the financial results were somewhat overshadowed in the conference call to explain earnings hosted by Tesla CEO Elon Musk and fellow executives, CTO JB Straubel and CFO Deepak Ahuja. Most questions asked by investors and analysts focused on the Tesla Energy suite of batteries and a lesser but still significant number of questions were asked about the company’s automotive launches.
CEO Musk also gave the first indication of pre-order numbers for the Powerwall home storage and Powerpack commercial storage battery systems, saying the response has been “overwhelming” and “crazy”. Analysts following the earnings release noted with interest that the company may even have to expand the scale of the Gigafactory production plant in Nevada beyond what was originally planned in order to meet demand.
Musk said around 2,500 Powerpack customer orders have been placed already and 38,000 Powerwalls, but explained that this is more likely to equate to 25,000 Powerpacks and between 50,000 to 60,000 Powerwalls. Given the sizing of available systems, each installation is likely to include more than one of each.
A letter to shareholders accompanying the results called it a “very strong start to a big year” for the company, confirming that the feted Gigafactory is on course to start producing its first battery packs in 2016. Meanwhile several models in Tesla’s EV range have progressed closer to mass production, the letter also said.
For the rest of the year, Tesla said it expects to sell around 55,000 Model S and Model X cars in 2015 and expects some areas, including gross margins in its Services segment, to be on break even by the second quarter and on track to hit 5% by the final quarter of 2015. The company will also make US$1.5 billion in capital expenditure investment this year.
Meanwhile, Musk said utilities have shown an interest in the larger scale storage systems, produced in 100kWh ‘battery blocks’, predicting that in the long run, the demand for utility-scale batteries for applications including grid stabilising services will lead to “five to 10 times more megawatt hours” being deployed at those sizes than at the consumer level.
In response to this cited high demand, it was already a possibility the Gigafactory would be increased even further in size from its planned ramp up capacity, Musk said, but refused to be drawn on how much or how soon.
“…We're actually trying to figure out if we can go from like our current production target of like 35-gigawatt hours at the cell level and 50 at the pack level in our Nevada plant to maybe 50% more than that or even higher because just the sheer volume of demand here is just staggering,” Musk said.
“We could easily have the entire Gigafactory just do stationary storage.”
Transcript provided by Seeking Alpha
For reactions to the Tesla Energy battery launches from industry participants, including an evaluation of some of the questions that remain over possible business models and regional markets, read today's PV Tech Storage Editor's Blog.