Tesla Motors (TSLA) Earnings Report: Will It Be a Brick? KNDI, TM & GM
The Q3 2014 earnings report for electric vehicle (EV) stock Tesla Motors Inc (TSLA), a peer of Chinese EV stock Kandi Technologies Group Inc (KNDI) and automakers Toyota Motor Corp (TM) and General Motors Company (GM), is scheduled for after the market closes on Wednesday (November 5th).
The Q3 2014 earnings report for electric vehicle (EV) stock Tesla Motors Inc (NASDAQ: TSLA), a peer of Chinese EV stock Kandi Technologies Group Inc (NASDAQ: KNDI) and automakers Toyota Motor Corp (NYSE: TM) and General Motors Company (NYSE: GM), is scheduled for after the market closes on Wednesday (November 5th). Aside from the Tesla Motors earnings report, it should be said that Kandi Technologies Group Inc reported Q2 2014 earnings on August 11th (Revenue grew 171.1% to $32.96M, EV products revenue increased by 552.1% to $13.25M and GAAP net income was $11.16M verses a net loss of $1.04 million); Toyota Motor Corp will also release Q2 2015 earnings on Wednesday (November 5th); and General Motors Company reported Q3 2014 earnings on October 22nd (profit nearly doubles, led by North America and higher prices). However, Tesla Motors is going into earnings with a somewhat volatile chart and elevated short interest of 24.98% according to HighShortInterest.com.
At the end of last July, Tesla Motors reported that revenue nearly doubled to $769.3 million along with a loss of $61.9 million, or 50 cents per share, compared with a loss of $30.5 million, or 26 cents per share, in the same quarter a year ago. The shareholder letter had the following summary:
We have had an active first half of 2014, and the rest of the year is expected to be even busier. The development of our large-scale battery manufacturing facility, known as the Tesla Giga factory, is proceeding well. We have formalized our agreement with Panasonic for cell manufacturing at the Giga factory and remain on track with the site selection process. In addition, we are adding new production capacity at our Fremont factory that will allow us to meet the growing world wide demand for our vehicles. The speed at which we are executing this capacity upgrade will allow us to exceed 35,000 Model S deliveries this year. Provided that we execute well and there are no serious macroeconomic shocks, Tesla’s annualized delivery rate should exceed 100,000 units by the end of next year.
And from the guidance section:
We plan to produce about 9,000 cars in Q3. This target takes into account the effect of the two-week production shutdown related to the transition to the new final assembly line at the Fremont factory…. We plan to invest between $750 million and $950 million in 2014, an increase of $100 million from prior guidance. We continue to invest in additional production capacity, continued Model X and Model S development, Giga factory construction, and further expansion of our sales, service, and Supercharger footprints.We have also chosen to slightly accelerate our investments in production capacity and the Giga factory.
Regarding the Giga factory and how much it will cost, Elon Musk responded to a question during the earnings call (the transcript is available here on Seeking Alpha) about it by saying:
Sure. Yes, that $4 billion to $5 billion number is we think probably accurate. I mean particularly over through 2020, I think it'll be closer to $4 billion, maybe slightly less than that, before we get to initial high-volume production. But then as we do continued investments to improve output and improve the technology of the pack, it's probably closer to the $5 billion over the 2020 timeframe, but probably less than $4 billion to get up to serious production.
And then of that number, we see Tesla probably providing 40% to 50% of the total, Panasonic probably about 30% to 40%, the states maybe 10%, and other industrial partners about 10%, maybe 15% to 20%, depending on how vertical [ph] we go with the factory.
What do the Tesla Motors Inc Charts Say?
The latest technical chart for Tesla Motors shows a volatile uptrend:
A long term performance chart shows EV stocks Tesla Motors and Kandi Technologies Group Inc cruising past Toyota Motor Corp and General Motors Company:
A technical chart for Kandi Technologies Group Inc shows a wide range between a floor and ceiling while Toyota Motor Corp has a mix of trend lines and General Motors Company has been trending down from a summer time bump:
What Should Be Your Next Move?
Investors and the shorts alike are going to want to see evidence that Tesla Motors can deliver eventual deliver on 100,000 units by delivering on 9,000 for the quarter and 35,000 Model Ss for the year plus continued demand for EVs as oil prices fall. Hence, pay attention to any delivery figures or other demand indications or evidence from North America, Europe and especially China (Note: Tesla doesn't break out every geography in its financial reports).
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