Steady progress was the theme of Tesla’s second-quarter report, released after the bell on Thursday.
Development of the Gigafactory is firmly on track – the company formalized a partnership agreement with Panasonic, and has broken ground at a site near Reno, Nevada. Although, the final location of the factory is still uncertain.
“Consistent with our strategy to identify and break ground on multiple sites, we continue to evaluate other locations in Arizona, California, New Mexico, and Texas,” said Tesla. “The final site for the first Gigafactory will be determined in the next few months, once we have full visibility and agreement on the relevant incentives and processes for enabling the Gigafactory to be fully operational to meet the timing for Model 3.”
Tesla is in the middle of a major upgrade at its Fremont plant, adding more automation and increasing efficiency. A new assembly line will have the flexibility to build both Model S and Model X, and the capacity to produce more than 1,000 vehicles per week. The company expects to deliver 35,000 vehicles in 2014, and over 100,000 by the end of 2015 (which would be more than the total number of plug-ins sold in the US in 2013).
Model S demand continues to grow even in established markets. In both North America and Europe, Q2 orders increased at a faster rate than for the rest of the automotive industry, according to the company. Meanwhile, new markets are steadily plugging in – Model S is “off to a very encouraging start in China.” Right-hand-drive Model S are now hitting the roads in the UK and Hong Kong, and Tesla plans to begin deliveries in Japan and Australia later this year.
Model X remains on track to begin production in the spring of 2015. Tesla expects to have operational Alpha prototypes ready within the week, and Beta prototypes later this year.
Non-GAAP revenue was $858 million for the quarter, up 55% from a year ago, while GAAP revenue was $769 million. This includes $23 million of powertrain sales to Daimler and Toyota, as production of the Mercedes-Benz B Class Electric Drive begins (and the Toyota RAV4 EV deal winds down).
Q2 non-GAAP net income was $16 million, or $0.11 per share, while Q2 GAAP net loss was $62 million or $(0.50) per share. These figures were slightly better than most analysts’ expectations, and TSLA shares, which had been up and down for the past week, gained a wee bit in Friday’s trading.