Tesla Q2 Earnings Report Falls Short As It Otherwise Shoots For the Stars

Wildly ambitious Tesla promises very favorable long-term numbers but its second quarter earnings report released today had figures that did not meet analysts’ expectations.

The company is not yet profitable, is not expected to be at this stage of burning cash to build and unify its businesses of vehicles, solar power and energy storage, but losses reported of $1.06 per share were worse than a projection of 52 cents.

Including expenses, the loss was $2.09 per share, and the same poll by Thomson Reuters that set the 52-cent estimate had figured Tesla would lose 94 cents per share under that metric.

Losses of $293 million for the second quarter were 59-percent greater compared to the second quarter one year prior. Revenue was up 32 percent at $1.3 billion. Thomson Reuters had estimated Tesla would take in $1.6 billion in revenues, and Tesla said this it did do, after adjusting for certain costs.

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Vehicles delivered in Q2 tallied to 14,402, shy of a 17,000-unit target, and about 30 units more than it had said in an adjusted forecast in July. This year assuming 50,000 more units it says it is on track for, it may hit the low end of its total-year guidance of 80,000-90,000.

But as noted, Tesla has been busy. The earnings news comes the week after its grand opening of the Nevada Gigafactory battery plant, and this Monday it announced a planned acquisition of SolarCity for $2.6 billion.



The company is accelerating its global footprint in terms of retail space, service space, charging networks, and its Master Plan, Part Deux announced last month lays it all out.

High on the priority list is to begin production as soon as later next year of the $35,000 and up Model 3 – which may average around $42,000 with options, according to a tweet by CEO Elon Musk. More than 400,000 people have placed deposits to reserve the Model 3.

The company is also at work on long-term plans to fill out a product assortment that would include a crossover, van, pickup truck, bus and semi, among other vehicular options from small to large.

Tesla has always been controversial to one degree or another and has been a focus of options strategy players while those invested long have argued the case for its ultimate success.

Analysts and others of late are publishing more frontally challenging pieces with varying degrees of politeness assessing Musk’s ambitions to reinvent the transportation industry.

The overview on its investors page sets the tone for the boilerplate Tesla party line:

We believe that more than 100 years after the invention of the internal combustion engine, incumbent automobile manufacturers are at a crossroads and face significant industry-wide challenges. The reliance on the gasoline-powered internal combustion engine as the principal automobile powertrain technology has raised environmental concerns, created dependence among industrialized and developing nations on oil largely imported from foreign nations and exposed consumers to volatile fuel prices. In addition, we believe the legacy investments made by incumbent automobile manufacturers in manufacturing and technology related to the internal combustion engine have to date inhibited rapid innovation in alternative fuel powertrain technologies. We believe these challenges offer a historic opportunity for companies with innovative electric powertrain technologies and that are unencumbered with legacy investments in the internal combustion engine to lead the next technological era of the automotive industry.


In its favor for Q2, despite raised eyebrows here and there, Tesla touted accomplishments including the completion of the Model 3 design phase, increased margins on Model S and Model X, and consistent production of nearly 2,000 vehicles per week.

Never shy to shape the ongoing narrative of the Tesla Story, Musk tweeted this week a vote of confidence for Tesla's gambit.

Never shy to shape the ongoing narrative of the Tesla Story, last week Musk tweeted a vote of confidence published making a case for Tesla’s “fruitful synergies.”

It says these and other developments including the SolarCity merger keep the case viable that the glass is half full for fulfilling its goals, not half empty.

Tesla’s explanation of last quarter’s numbers can also be seen in its Q2 2016 update letter.