Tesla Likely To Swing Back To Net Loss In Q1 Amid Weaker Deliveries

by Trefis Team
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Tesla (NASDAQ: TSLA) is expected to publish its Q1 2019 results on April 24, reporting on a quarter that saw the company post a 30% sequential decline in automotive deliveries. Below we take a look at some of the key trends to watch when the company reports earnings.

View our interactive dashboard analysis on what to expect from Tesla in Q1 2019. You can modify key drivers to arrive at your own estimates for the company’s revenues and margins, and see more Trefis Consumer Discretionary company data here.

What to expect from Tesla in Q1 2019

  • Trefis forecasts Q1 revenues of about $5.4 billion, down by 26% sequentially.
  • We expect a net loss per share of around $0.65, compared to EPS of $1.93 last quarter.

What are some of the factors driving the decline?

  • Tesla’s total deliveries declined 30% sequentially ~ 63,000 vehicles, which likely hurt revenues.
  • While Model 3 deliveries fell by about 20% sequentially to ~51k units, Model S & X deliveries fell by 56% to ~12k units.
  • The lower revenues will hurt fixed cost absorption, while the weaker mix of higher-margin Model S & X revenues will put pressure on gross margins.

Why are Model 3 sales declining?

  • Tesla is pushing to scale up Model 3 deliveries in the EU and China, where it has been facing some logistical issues.
  • 10,600 vehicles (all models) were in transit at end of Q1, causing deliveries to shift to Q2. For perspective, only 3k vehicles were in transit at the end of Q4 2018. This likely bodes well for Q2 delivery figures.

What about the Model S and X decline?

  • The halving of the $7,500 federal tax credit earlier this year may have hurt demand.
  • Further, Tesla has stopped production of lower-priced 75-kilowatt-hour battery versions of S and X.
  • An anticipated interior or design upgrade may also be causing some buyers to hold off for now.

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