10-QPeriod: Q2 FY2011

Tesla, Inc. Quarterly Report for Q2 Ended Jun 30, 2011

Filed August 12, 2011For Securities:TSLA

Summary

Tesla Motors, Inc. (TSLA) reported its financial results for the quarter and six months ended June 30, 2011. Total revenues significantly increased by 105% year-over-year to $58.2 million for the quarter, driven by a 63% rise in automotive sales and a substantial increase in development services revenue. Despite revenue growth, the company continued to incur operating losses, with a loss from operations of $58.7 million for the quarter, primarily due to increased research and development expenses related to the Model S program. The company also highlighted significant investments in manufacturing infrastructure and R&D for Model S and Model X, expecting continued R&D spending to increase moderately. Tesla's liquidity position remained strong, with approximately $661.5 million in principal sources of liquidity available at the end of the quarter, including cash, cash equivalents, and remaining DOE loan facility funds.

Financial Highlights

44 data points
Beta

Revenue

$58.17M

31.8% Gross Margin

Net Income

-$58.90M

-101.3% Net Margin

Total Assets

$646.15M

Cash & Equivalents

$319.38M

Free Cash Flow

-$76.80M

Financial Statements
Beta
Revenue$58.17M
Cost of Revenue$39.66M
Gross Profit$18.51M
R&D Expenses$52.53M
SG&A Expenses$24.72M
Operating Expenses$77.25M
Operating Income-$58.74M
Net Income-$58.90M

Key Highlights

  • 1Total revenues for the three months ended June 30, 2011, increased by 105% to $58.2 million compared to $28.4 million in the prior year period.
  • 2Automotive sales revenue grew by 63% year-over-year, driven by strong global demand for the Tesla Roadster and increased deliveries of battery packs and chargers to Daimler.
  • 3Development services revenue saw a significant increase to $19.1 million from $4.4 million, primarily due to development activities for the Toyota RAV4 EV program.
  • 4Research and development expenses more than tripled to $52.5 million due to continued validation and testing of the Model S alpha prototype fleet and Model S manufacturing facility development.
  • 5Capital expenditures increased significantly to $54.3 million for the quarter, driven by investments in manufacturing and powertrain facilities for Model S and Model X.
  • 6The company completed a follow-on offering in June 2011, raising $172.7 million, with additional proceeds of $59.1 million from concurrent private placements.
  • 7As of June 30, 2011, Tesla had approximately $661.5 million in principal sources of liquidity available, including cash and cash equivalents of $319.4 million.

Frequently Asked Questions

Tesla is experiencing significant revenue growth, more than doubling year-over-year in the second quarter of 2011. However, the company is still incurring substantial operating losses, primarily due to heavy investment in R&D and manufacturing for upcoming models like the Model S and Model X. Despite the losses, Tesla maintains a strong liquidity position, with substantial cash and available loan facilities, which are crucial for funding its ambitious development plans.

Revenue growth is driven by two main segments: Automotive Sales and Development Services. Automotive Sales benefit from increased global demand for the Tesla Roadster and powertrain component sales (like battery packs and chargers) to other manufacturers, notably Daimler. Development Services revenue has surged due to significant work on the Toyota RAV4 EV program.

R&D expenses have significantly increased, largely due to the extensive testing and development of the Model S and preparation for its production, including investments in manufacturing facilities. Tesla anticipates R&D spending will continue to rise moderately as they progress with Model S development, prepare manufacturing, and advance work on the Model X. The company's strategy remains focused on disciplined development of Model S for a mid-2012 launch, continued Roadster sales, strategic partner activities, and advanced engineering for future models.

Tesla is funding its operations and expansion through a combination of cash generated from sales (Roadster, powertrain components), development services, customer reservation payments for the Model S, drawdowns from its Department of Energy (DOE) loan facility, and equity financings. The company successfully completed a follow-on stock offering and private placements in June 2011, raising significant capital. The DOE loan facility remains a crucial source of funding for Model S and powertrain development.