10-KPeriod: FY2018

Tesla, Inc. Annual Report, Year Ended Dec 31, 2018

Filed February 19, 2019For Securities:TSLA

Summary

Tesla, Inc.'s 2018 10-K filing (filed Feb 2019) reveals a company aggressively scaling its automotive operations, particularly with the Model 3, which saw significant production ramp-up throughout the year. The company reported substantial increases in vehicle deliveries, with a stated goal of reaching 7,000 Model 3 vehicles per week by the end of 2019 and an annualized output exceeding 500,000 units between late 2019 and mid-2020, including contributions from the new Gigafactory Shanghai. Beyond vehicles, Tesla continued to expand its energy generation and storage segment, with significant growth in energy storage deployments. However, the company also highlighted ongoing risks related to production scaling, supply chain dependencies, and the capital-intensive nature of its operations, with ongoing capital expenditures projected for manufacturing capacity expansion and infrastructure development.

Financial Highlights

53 data points
Beta

Revenue

$21.46B

18.8% Gross Margin

Net Income

-$976.00M

-4.5% Net Margin

EPS (Diluted)

$-0.38

Total Assets

$29.74B

Cash & Equivalents

$3.69B

Free Cash Flow

-$3.00M

Financial Statements
Beta
Revenue$21.46B
Cost of Revenue$17.42B
Gross Profit$4.04B
R&D Expenses$1.46B
SG&A Expenses$2.83B
Operating Expenses$4.43B
Operating Income-$388.00M
Interest Expense$663.00M
Net Income-$976.00M
EPS (Basic)$-0.38
EPS (Diluted)$-0.38
Shares Outstanding (Basic)2.56B
Shares Outstanding (Diluted)2.56B

Key Highlights

  • 1Tesla achieved a significant production ramp-up for the Model 3 in 2018, delivering 245,506 vehicles, a 138% increase year-over-year.
  • 2The company reported substantial growth in its energy storage segment, more than tripling deployments in 2018 compared to 2017.
  • 3Plans for Gigafactory Shanghai were underway, with the goal of commencing Model 3 production there by the end of 2019 to serve the Chinese market.
  • 4Total revenues for 2018 reached $21.46 billion, an 83% increase compared to 2017, driven primarily by automotive sales.
  • 5The company continued to invest heavily in R&D and capital expenditures, projecting $2.5 billion in capital expenditures for 2019, largely for increasing vehicle production capacity and expanding infrastructure.
  • 6Tesla highlighted ongoing risks related to production scaling, supply chain management, and the successful ramp-up of new facilities like Gigafactory Shanghai.
  • 7Gross margin for the automotive segment remained stable at 23% in 2018, but the energy generation and storage segment saw a decrease in gross margin from 22% to 12%.

Frequently Asked Questions

In 2018, Tesla reported total revenues of $21.46 billion, a significant increase of 83% from 2017, primarily driven by a substantial ramp-up in automotive sales, particularly the Model 3. While gross profit increased, the company reported a net loss attributable to common stockholders of $976.1 million for the year. Despite the net loss, operating cash flow turned positive, reaching $2.1 billion for the year.

Tesla's primary growth driver is the continued scaling of its automotive production, especially the Model 3, with ambitious targets for weekly and annual production volumes. The company is also focused on expanding its energy generation and storage business, with plans to double energy storage deployments in 2019. Key strategic initiatives include increasing production capacity at existing facilities, building Gigafactory Shanghai for Model 3 production, and enhancing its global retail, service, and Supercharger network infrastructure.

Tesla identified several key risks, including potential delays or complications in the design, manufacture, and launch of new vehicles and products, such as Model Y and Solar Roof. The company also highlighted its dependence on suppliers, the challenges of scaling manufacturing to high volumes cost-effectively, and the competitive automotive market. Additionally, risks related to international expansion, regulatory changes, and the successful management of growth across all its business segments were emphasized.