Tesla Q1 Earnings Announcement Raises Big Hopes Amidst Big Concerns

Tesla’s first-quarter earnings announcement today continued to offer hope for supporters who believe they’re witnessing growth pangs of a rising star, and fodder for critics who’ve called a death watch.

For his part, Tesla chief Elon Musk told analysts he was feeling good about things even as the company reported triple losses at $154 million by non-GAAP reckoning, or alternately $45 million lost by non-GAAP measure along with $1.1 billion of non-GAAP revenues for a 55 percent increase.

The announcement beat analysts’ predictions by losing 36 cents per share – less than the 50 cents they’d thought – and despite concerned voices saying Tesla better watch out, the upside is the company is not at all strapped for business.

Rather, it has customers queued up like Apple gets when it releases its next iWhat-have-you – but with Tesla, we’re talking expensive electric cars and now energy storage units.

With thousands of reservation holders trying to be patient, its Model X SUV is due Q3 this year after long delay, and, since only this week, Musk says response to the Powerwall battery system is just “nutty,” with 38,000 reservations for home customers, and 2,500 for utilities.

Elon Musk has his hands full. Says he's feeling good these days though.

Elon Musk has his hands full. Says he’s feeling good these days though.

To top this off, Musk said maybe around March next year the world will get its first view of the Model 3 and it is to go on sale after Q2 2017.

But less boisterous and more neutral observers say the Model X cannot get here fast enough, and Tesla needs the income from a car for which it’s now burning cash as it preps its Fremont factory and finalizes and proof-tests it as production approaches.

“We certainly have a lot of customers who have been waiting a long time,” Musk said acknowledging realities, while ever upbeat and characteristically spinning things large. “This is really a great car … Because it has such a low center of mass it handles like a sports car even though it’s an SUV, and it’s got incredible acceleration. The performance is just surreal. Nothing else is comparable.”

More people may be excited by the Model X given so many have plunked down at least $5,000 on reservations but the Model 3 is the car Tesla wants to sell in volume of hundreds of thousands of units by 2020.

For all those who just can’t quite scrape together high-fives and low-six figures for a super quick EV, the Model 3 is what Tesla has held out as promise for “the masses.”

The Model 3 has however not been seen even as a drawing or design concept stage unlike the Model S which was running around in prototype form three years before its 2012 launch leading the jaded to say Model 3 will prove to be vaporware and Tesla will fold.

Rather, Musk anticipates Model 3 will be on sale by second quarter of 2017 though it’s noteworthy that Tesla has been a serial launch misser and has previously made promises that were changed to one degree or another as plans changed. So how reliable will be the hope of Model 3 in a Tesla showroom near you by October 2017 remains to be seen.

Sooner or later though, Musk is determined to make it happen. Needed first, of course, is batteries from the Gigafactory to open next year – and, this venture happens to be ahead of schedule.

However, adding to the picture’s complexity, Musk said today due to off-the-wall Powerwall demand, he’s contemplating expansion of the Nevada plant by 50 percent.

“The sheer volume of demand here is just staggering … we could easily have the entire gigafactory just do stationary storage,” said Musk.

SEE ALSO: Beyond Automotive: Tesla Introduces ‘Powerwall’
Meanwhile, demand for the company’s one selling product, Model S, is “growing” and the company delivered 10,045 during Q1 while projecting 12,000 for Q2.

This year it projects 55,000 sales of the Model S and Model X, adding Model X production will ramp up considerably faster than was the case in Q4 2012 for the Model S.

Overseas, Tesla has been hampered by issues in China and in Europe it’s raising prices 5 percent to compensate for a strong dollar.

Overall, Musk says he expects Tesla to be cash flow positive by the fourth quarter of this year. The company’s stock dipped 1.08 percent at the trading day’s close going into the announcement but rose as high as 5 percent in after hours trading.

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