Tesla Q4 Earnings Live Updates, Revenue Results

Eric Jhonsa

EV maker Tesla TSLA is keeping the good times rolling, reporting earnings and revenues that beat estimates. The news sent its stock sharply higher 6.5% to $618.80 in after-hours trading.

Tesla reported Q4 revenue of $7.38 billion versus a $6.99 billion consensus, and non-GAAP EPS of $2.14 beats a $1.77 consensus, according to FactSet.

TheStreet's tech columnist, Eric Jhonsa, is analyzing the company's earnings report due out after the close, and its call with analysts that's scheduled to begin at 6:30 p.m. ET.

Comments (67)
No. 1-50
Eric Jhonsa
Eric Jhonsa

Editor

Thanks for joining us.

Eric Jhonsa
Eric Jhonsa

Editor

Tesla's call has ended. Shares are up 11.7% after hours to $648.71 after the company beat Q4 estimates, reported Q4 free cash flow of $1.01B, guided for 2020 deliveries to "comfortably exceed" 500,000 and announced that Model Y deliveries will now start at the end of Q1.

Eric Jhonsa
Eric Jhonsa

Editor

Question about Tesla's plans for the ultracapacitor technology obtained via the Maxwell Technologies acquisition.

Musk: We'll talk about it at our battery day. Some retail investors have put together several pieces of the puzzle.

Eric Jhonsa
Eric Jhonsa

Editor

Question about the Shanghai production ramp.

Kirkhorn: We had a negative gross margin in Shanghai as we got off the ground. But it had only a small impact on total gross margin.

Eric Jhonsa
Eric Jhonsa

Editor

Question about battery production.

Musk: We've already seen massive growth in cell production capacity. Panasonic has been a great partner. Have added some smaller partners such as LG. Will have more to share at the battery day. We're "super deep" into battery cell technology.

Eric Jhonsa
Eric Jhonsa

Editor

Musk: We'll keep steadily paying down debt as we generate cash.

Eric Jhonsa
Eric Jhonsa

Editor

Musk: We're not aware of any company that we want to acquire.

Eric Jhonsa
Eric Jhonsa

Editor

Musk talks up Tesla's next-gen powertrain. Declares it will feel like "alien technology" when it arrives later this year.

Eric Jhonsa
Eric Jhonsa

Editor

Question about Tesla's pricing strategy.

Musk and Kirkhorn both reiterate that Tesla is trying to bring down costs, and make cars more affordable along the way. Musk also highlights the value-add that autonomy can provide.

Eric Jhonsa
Eric Jhonsa

Editor

Kirkhorn adds that Tesla wants both the Model 3 and Y produced in Fremont, Shanghai and Berlin.

Eric Jhonsa
Eric Jhonsa

Editor

Question about differences between Model 3 and Y. Also whether Tesla expects Model 3 sales to grow after Model Y launches.

Musk: We're not sure what's going to happen. Model X launch provided a lift to Model S sales. We're not too worried about demand, we're worried about production.

Adds that production typically follows an S curve, and that the steeper part of the curve is hard to predict.

Eric Jhonsa
Eric Jhonsa

Editor

Question about making a high-passenger-density vehicle.

Musk reiterates that Tesla battery supply is a constraint for now. Also says that many people like driving by themselves.

Eric Jhonsa
Eric Jhonsa

Editor

Question about Cybertruck production and costs.

Musk: The demand is far more than what we could reasonably make in 3 or 4 years. Focused on increasing battery production capacity to support higher car volumes. Battery supplies are why we haven't accelerated Semi truck production, since the Semi uses a lot of cells.

Says he wants to host a "battery day" to discuss Tesla's battery efforts. Suggests it could happen following the end of Q1.

Eric Jhonsa
Eric Jhonsa

Editor

Kirkhorn: We'll share additional details about capex plans in the 10-K.

Eric Jhonsa
Eric Jhonsa

Editor

Question about capex plans.

Musk: We're spending money as fast as we can spend money in sensible ways. We're making a lot of efficiency improvements behind the scenes.

Eric Jhonsa
Eric Jhonsa

Editor

Question about whether Tesla cars will support the Starlink satellite constellation.

Musk: It could eventually happen. Main focus for Starlink is providing connectivity for homes and businesses. Could put it on a car, but provides more bandwidth than what a car needs.

Eric Jhonsa
Eric Jhonsa

Editor

Question about the Model S and X. When will they use newer batteries?

Musk notes the efficiency of the battery cells used by the Model S and X have improved considerably over the years. Says Tesla is "rapidly approaching" a 400-mile range for the Model S.

Also says the Model S and X get more range than what Tesla lists on its website.

Eric Jhonsa
Eric Jhonsa

Editor

Question about opex growth.

Kirkhorn: We did see opex rise from Q3 to Q4. The Model Y and Shanghai drove it. We've learned a lot about cost efficiency.

Eric Jhonsa
Eric Jhonsa

Editor

Musk: It doesn't make sense for us to raise money right now, since we're generating cash.

Kirkhorn concurs, notes Tesla is still able to make big investments in new factories/production lines while being cash-flow positive.

Eric Jhonsa
Eric Jhonsa

Editor

Kirkhorn: The Shanghai Gigafactory's layout is much simpler than that of the Fremont factory. That will lead to greater efficiencies. We think margins for cars made at the Shanghai factory will be similar to those for the Fremont factory.

Musk adds that reducing shipping costs for Chinese sales will boost margins. Also suggests that the cost of meeting regulatory requirements in China isn't as high.

Eric Jhonsa
Eric Jhonsa

Editor

Musk: If you take a look at what some smart retail investors predicted about Tesla, some of them were more accurate than anyone else.

Eric Jhonsa
Eric Jhonsa

Editor

Question about full self-driving availability.

Musk says Tesla "might be feature-complete" for full self-driving in a few months. Talks up the progress made by Tesla's software teams, including for the video labeling efficiency of Tesla's Autopilot system.

Eric Jhonsa
Eric Jhonsa

Editor

Musk points out that insurance accounts for a major % of the cost of car ownership, and asserts that much of this has to do with a lack of good information among insurance firms about drivers. Says Tesla has that information.

Eric Jhonsa
Eric Jhonsa

Editor

Question about Tesla's insurance offering, and about how Tesla will leverage its data to lower insurance costs.

Kirkhorn: Tesla insurance currently available in CA. Working to bring it to other places, as well as to adjust our rates in CA. We want to use our technology to help reduce rates.

Eric Jhonsa
Eric Jhonsa

Editor

Musk: We're likely to support car-sharing ahead of the rollout of full self-driving.

Eric Jhonsa
Eric Jhonsa

Editor

First question is about the solar roof.

Musk: We see a lot of interest in the solar roof. Working with roofing firms. It's a matter of getting workers trained. This will become a major product line for Tesla.

Eric Jhonsa
Eric Jhonsa

Editor

The Q&A session is starting.

Eric Jhonsa
Eric Jhonsa

Editor

Notes the Shanghai Model 3 ramp and Fremont Model Y ramp will temporarily impact gross margins. Also says that Tesla is closely monitoring the coronavirus' impact on its Chinese operations, suggests there could be a slight impact.

Eric Jhonsa
Eric Jhonsa

Editor

Says opex will rise in 2020, but grow at a slower rate than revenue growth.

Eric Jhonsa
Eric Jhonsa

Editor

Kirkhorn reiterates Tesla expects a higher gross margin for the Model Y than the Model 3.

Eric Jhonsa
Eric Jhonsa

Editor

Kirkhorn: We've made progress in growing recurring and software-based revenue.

Eric Jhonsa
Eric Jhonsa

Editor

Kirkhorn: We've seen a stabilization of Model 3 ASPs. They rose slightly in Q4. Model S and X ASPs have been rising.

Eric Jhonsa
Eric Jhonsa

Editor

CFO Zach Kirkhorn now talking.

Eric Jhonsa
Eric Jhonsa

Editor

Notes Tesla produced over $1B in 2019 free cash flow in spite of Shanghai Gigafactory investments.

Eric Jhonsa
Eric Jhonsa

Editor

Musk on the Cybertruck: We built it without any preconceptions about how such a product should look. We wanted it to look like something that came out of a sci-fi set from the future. We think we'll sell as many as we can make for a number of years.

Eric Jhonsa
Eric Jhonsa

Editor

Musk notes Tesla has already begun producing the Model Y in limited volumes. Adds the all-wheel Model Y got an EPA rating of 315 miles.

Eric Jhonsa
Eric Jhonsa

Editor

Musk: It's hard to think of another business that can produce $20B in revenue with no advertising spend.

Eric Jhonsa
Eric Jhonsa

Editor

Elon Musk talking.

Eric Jhonsa
Eric Jhonsa

Editor

The call is starting.

Eric Jhonsa
Eric Jhonsa

Editor

Tesla's stock has further added to its gains: It's now up 11.7% after hours to $648.94. Its market cap is around $117B, and its enterprise value is near $125B.

Eric Jhonsa
Eric Jhonsa

Editor

Here's the webcast link, for those who want to tune in.

Eric Jhonsa
Eric Jhonsa

Editor

Hi. I'm back to cover Tesla's earnings call, which should start in a few minutes.

Eric Jhonsa
Eric Jhonsa

Editor

I'm taking a break, but will be back to cover Tesla's earnings call, which starts at 6:30 PM ET. Shares are currently up 9% after hours to $634.28 after Tesla beat Q4 estimates, issued a stronger-than-expected 2020 deliveries forecast and moved forward the start of Model Y deliveries to the end of Q1.

Eric Jhonsa
Eric Jhonsa

Editor

The "services and other" segment continues losing money, thanks in large part to the costs associated with supporting the Supercharger network. But its losses are narrowing some.

The segment had a gross loss of $94M on revenue of $580M, compared with a gross loss of $137M on revenue of $531M a year ago.

Eric Jhonsa
Eric Jhonsa

Editor

The Supercharger network continues steadily expanding. Tesla had 1,821 Superchargers at the end of Q4, up 10% Q/Q and 28% Y/Y.

Store and service locations rose 4% Q/Q and 13% Y/Y to 429.

Eric Jhonsa
Eric Jhonsa

Editor

Tesla says it wants to start Model Y production in Shanghai in 2021. Also reiterates that it plans to produce the Semi truck in "limited volumes" this year.

Eric Jhonsa
Eric Jhonsa

Editor

Also, with about 25M Tesla shares shorted as of 1/15, and many of those shorts now staring at major paper losses, there could be additional short-covering going on after hours.

Eric Jhonsa
Eric Jhonsa

Editor

With its stock having more than doubled since the Q3 report, expectations were high for Tesla going into the Q4 report, but it looks like the company lived up to them. The 2020 deliveries guidance and the updated Model Y delivery schedule particularly seem to be going over well.

Eric Jhonsa
Eric Jhonsa

Editor

Thanks to Q4's strong free cash flow, Tesla's cash balance rose by $930M Q/Q to $6.3B. The debt balance stood at $13.4B at quarter's end.

Eric Jhonsa
Eric Jhonsa

Editor

The solar business deployed 54MW in Q4, up 26% Q/Q but down 26% Y/Y.

The energy storage business deployed 530MWh, up 11% Q/Q and 136% Y/Y.


Earnings

FEATURED
COMMUNITY