On Wednesday, Tesla Inc. posted its fourth quarter and full year 2016 earnings report, with the car company expressing positive outlook for its latest car design, Model 3 as production of the model are meeting quotas for September so far.
Tesla CEO Elon Musk said that the production of the Model 3 is meeting quotas and set to meet number of units that are needed to support deliveries prior to the release of the model by the second half of 2017.
Meanwhile, Tesla stated to its press release that due to previous circumstances wherein the auto company fails to meet production quota, that it is planning for two more, possibly three, additional Gigafactories set to be finalized by the end of the year.
“Ahead of the Model 3 launch, we are reengineering and expanding our operations as we anticipate the needs of a much larger family of Tesla owners. In service, since more than 80% of our repairs are so minor that they can be done remotely, we are expanding our mobile repair service that allows Tesla to make vehicle repairs at an owner’s home or office,” said Tesla.
According to the release, even with the Gigafactory 1 still unfinished, the company is currently finalizing possible locations for Gigafactories 3, 4 and possibly 5.
Gigafactory 1, the largest factory by footprint in the world located in Reno, Nevada, is where Tesla’s cars are produced and assembled, while Gigafactory 2 is the facility used by Tesla and Panasonic in building solar panels headquartered in Buffalo.
Meanwhile, orders for both Model S and X have reached record highs during the fourth quarter of 2016. “In Q4, we received 49% more global net orders for Model S and X combined, compared to the same period in 2015, as both vehicles continue to win over new customers,” Tesla mentioned.
Fourth Quarter and Full Year report
Tesla saw an increase of 77% for its vehicle production year-on-year, but was down 1% from the previous quarter. Vehicle deliveries for the quarter saw a decline of 10% but were up by 27% for the full year. In Q4, Tesla was able to reduce service backlog by 25%. The number of vehicles serviced per day also increased by 45% since the third quarter of 2016.
Meanwhile for the company’s solar powered products targeted at advancing sustainable energy for all, a total of 201 MW of solar energy generation were deployed during the fourth quarter. The company’s solar operations were able to generate around $77 million in cash during the six weeks following Tesla’s acquisition of SolarCity.
The fourth quarter results already include results from SolarCity’s operations starting from the close of the negotiation on November 21 to December 31.
Total revenue for the fourth quarter was at $2.3 million, 1% down from the previous quarter and 88% up YoY. The total gross margin increased 19.1% for the December quarter and was at 110bp YoY.
Tesla expects to deliver around 47,000 to 50,000 Model S and Model X vehicles during the first half of 2017.
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