Tesla 2Q 2016 Financial Results

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PALO ALTO, CA August 3, 2016; Tesla has released its financial results for the second quarter ended June 30, 2016, by posting the current Update Letter (PDF) on its website. Please visit the investor relations section of the Tesla website at http://ir.tesla.com to view the letter.

INDUSTRY COMMENTS

From Karl Brauer, senior analyst for Kelley Blue Book:
“The most critical numbers in Tesla’s Q2 report, revenue and profit, came in worse than expected, though that will have minimal impact on the stock’s value. The bigger question: how long can Tesla lose money, and how wide can its losses get, before Wall Street cries foul? Several key aspects of Musk’s business plan, including a merger with SolarCity and the launch of the Model 3, will occur over the next 12-24 months. Until those events happen, and we’re given a solid idea of how each impacts the company, the quarterly numbers will remain largely academic.”

From Rebecca Lindland, senior analyst for Kelley Blue Book:
“Investors aren’t going to like this result at all, especially with the SolarCity deal sitting on the table. But what’s interesting is that based on my calculation, the earnings missed by 706 vehicles, which they should be able to make up in the third quarter. Of course, that’s what they probably said last quarter! Investors need to see the company meet expectations, even when those expectations are for a loss. But they’ve also proven to be a very resilient lot, so reaction may be more muted than if this was a different company.”

From Michelle Krebs, senior analyst for Autotrader:
“Tesla’s loss that was twice what analysts expected on production volume, that was lower than anticipated, illustrates that the auto business is hard and it is expensive. One wonders if the activity around acquiring Solar City caused Tesla to lose focus on its first business – making cars.”

From Akshay Anand, analyst for Kelley Blue Book:
“Tesla missed expectations relative to earnings, but as always, this is simply a benchmark against what stock analysts think will happen. What may be more prudent is what else is going on with Tesla – the SolarCity merger, Model X issues, upcoming Model 3 production and more. Tesla’s delivery number is notable, as demand for its high-end vehicles will once again have a lower ceiling due to price. Notably, Tesla’s shareholder letter also doesn’t go into a ton of detail about third quarter guidance or give further updates on Model 3. Tesla did mention increased production efficiencies, which it desperately needs. The bottom line, though, is that earnings missed expectations, and Tesla still has its work cut out to turn a profit.”