Tesla grows revenue to $7B
Per-share loss for year less than analysts’ estimates; CEO says production of Model 3 on track
PALO ALTO — After expanding and unveiling new products last year, Tesla beat analysts’ expectations for annual revenues and managed to dampen losses in the final quarter of the year.
Tesla announced Wednesday it saw revenue grow to $7 billion, a jump over last year’s $4.05 billion. Analysts surveyed by Bloomberg expected 2016 revenues to reach $6.85 billion.
CEO Elon Musk told investors the company can hit aggressive manufacturing deadlines and expansion this year. Tesla expects to deliver the Model 3, an all-electric $35,000 sedan, and new solar roof tiles in the second half of this year.
The company expects to produce more than 5,000 Model 3 sedans per week by the end of the year.
The manufacturing process for the car will be simpler be-
cause it has fewer computers, wiring and luxury features than other Teslas, Musk said.
“It’s going to be a very compelling car, but it’s a simpler design,” he said.
The upbeat guidance from company leaders came after another full year of losses for the electric vehicle and renewable energy company. Tesla acquired SolarCity, one of the country’s largest solar installers, in November.
Tesla lost $4.68 per share for the year, better than analysts’ expectations of $4.88 per share. Excluding certain one-time expenses, Tesla lost $2.87 per share, better than estimates of $2.96 per share.
The company also said it was on track to deliver between 47,000 and 50,000 Model S and Model X SUVs in the first half of this year. The company cautioned that deliveries of the Model 3 and solar roofs could be impacted by even a few weeks’ delay.
The first Model 3 cars will be delivered to Tesla employees, allowing the company to quickly fix any bugs in the initial release, Musk said.
The Model 3 drew nearly 400,000 reservations in the days after its unveiling. Musk declined on Wednesday to say how many reservations the company currently holds.
The stock gained about 1.6 percent in after-hours trading. The share price has shot up more than 50 percent in the past three months, approaching record levels.
Some analysts feel the company is overpriced, even as it pushes forward with new products. Tesla, which delivered 76,000 vehicles last year, has a market value of about $44 billion.
Traditional automakers that produce millions of vehicles annually are valued only slightly higher — Ford at $51 billion and GM at $57 billion.
Analyst Clement Thibault of Investing.com said Musk’s leadership and vision have benefited the company, but it has yet to show up on the bottom line.
“A high valuation for a potentially disruptive company is warranted,” Thibault wrote to investors, but he cautioned that “from an automotive perspective, Tesla brings little to the table — whether technologically or from a design perspective — that other automakers can’t or won’t bring to market within the next few years.”
Michael Harley, an executive analyst for Kelley Blue Book, said the company’s future could hinge on the Model 3.
“If the company can’t meet its output goals of 5,000 units per week by the end of 2017, which is highly optimistic considering the obstacles it has faced with prior model start-ups, the stumble may be the fall that breaks the company’s knees,” Harley wrote.
Musk said the company is on track to manage the rapid growth.
The company also announced the departure of Chief Financial Officer Jason Wheeler, who will be taking a position in the public sector. Former Chief Financial Officer Deepak Ahuja will return to the company and assume his former job in March.