Tesla, Inc. Quarterly Report for Q1 Ended Mar 31, 2011

Summary

Tesla, Inc. (TSLA) filed its Form 10-Q for the quarterly period ending March 31, 2011, reporting significant revenue growth and continued investment in future products. Total revenues more than doubled year-over-year, driven by a substantial increase in automotive sales, primarily from powertrain component sales to Daimler AG and higher Tesla Roadster deliveries. Development services revenue also saw a dramatic increase, largely due to work with Toyota on the RAV4 EV program. Despite the strong top-line growth, the company continued to operate at a net loss, which widened compared to the prior year. This increase in net loss was primarily attributed to a significant rise in research and development expenses, heavily influenced by investments in the Model S program, including alpha prototype development and manufacturing facility preparations. Selling, general, and administrative expenses also increased to support global sales and marketing expansion. The company ended the quarter with a healthy cash and cash equivalents balance, supported by drawdowns under its Department of Energy loan facility, indicating sufficient liquidity for its near-term operational needs and planned Model S development.

Key Highlights

• 1Total revenues increased 136% year-over-year to $49.0 million, driven by a 63% increase in automotive sales and a substantial rise in development services revenue.
• 2Automotive sales benefited from increased powertrain component shipments to Daimler AG for the Smart fortwo and A-Class programs, alongside higher Tesla Roadster deliveries.
• 3Development services revenue surged due to work on the Toyota RAV4 EV program, with significant milestones achieved and additional revenue expected.
• 4Research and Development (R&D) expenses more than tripled to $41.2 million, primarily reflecting increased investment in the Model S program, including alpha prototype builds and manufacturing facility preparations.
• 5The company reported a net loss of $48.9 million for the quarter, a widening from the $29.5 million net loss in the prior year's comparable quarter, due to higher operating expenses.
• 6Cash and cash equivalents stood at $100.7 million, with total available liquidity, including restricted cash and DOE loan facility availability, at $506 million.
• 7Capital expenditures increased significantly to $20.5 million, reflecting investments in the Fremont manufacturing facility and Model S-related equipment, with full-year capital expenditure guidance ranging from $190 million to $215 million.

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