EV Maker Tesla’s Q4 Earnings Call

Winding down the Roadster, ramping up the Model S, losses continue on revenue growth—no surprises at the pioneering EV maker.

Tesla Motors (Nasdaq:TSLA) just announced its financial results for the quarter and year ending December 31, 2010.

Revenues for the fourth quarter of 2010 were $36.3 million, a 16 percent increase from the $31.2 million reported in the prior quarter. Gross margin improved to 31 percent, up from 30 percent for the prior quarter. On a full-year basis, 2010 revenues were $116.7 million as compared with revenues of $111.9 million reported in the prior year. Gross margin improved to 26 percent for the full year 2010, up from 9 percent for 2009.

Net loss for the quarter was $51.4 million as compared to $34.9 million in the prior quarter. On a non-GAAP basis, net loss for the quarter was $44.1 million as compared to a non-GAAP net loss of $34.2 million in the prior quarter. 



"The highlight of the quarter was our on-time completion of the first driveable Model S alpha," according to CEO Elon Musk. Tesla reaffirmed that it remains on schedule for the first customer deliveries of the Model S in mid-2012. Tesla now has over 3,700 refundable Model S reservations with a minimum $5000 deposit.

Notably, the Roadster is intended to be a limited edition collector's item, with production to be capped at 2,500 vehicles. So, if you want one of those $110,00 sports cars, act now or be prepared to shop on the used car market. The real future for Tesla Motors is the Model S and future models that will be based on the Model S and future powertrains.

According to Musk, battery technology for the short term is still in the 18650 form factor. "For the next several years we don't see anything better than 18650," according to the CEO. Tesla's 18650 laptop-size batteries from Panasonic are the standard package, albeit with modifications for Tesla's requirements. 

Tesla's revenue in 2010 came from roadster sales and to a lesser extent powertrain sales and engineering services.



Musk regularly drives the Alpha build of the Model S and is "pleased with how the product is developing." He claims that even if the car wasn't electric -- it would be the preferred vehicle amongst premium sedans. He said that Tesla considers the Model S "more advanced" in terms of safety factors, internal useful volume and torsion rigidity than the Audi A8.



Business Highlights

Tesla's CFO provided revenue guidance for 2011: Revenue to increase by 40 percent to 50 percent -- in the $160 million to $175 million range.

Tesla is building their vehicles in a vertically integrated fashion. According to Musk, "Some would disagree, but we think vertical integration is a smart move" that allows the firm to control unit costs, remain agile and adapt rapidly. 

Revenue at the company will continue to increase but profits are still many quarters away. Tesla stock was down 1 percent to $22.84 at the close of the market today.