Tesla lost $2 billion in 2017 and expects to make a profit in 2018

Photovoltaic panels and electric cars for sale at the same location. Photo: Mark Dixon.

Tesla Inc. (NASDAQ: TSLA) reported a net loss of $1.96 billion (€1.6 billion) in 2017, up from $674.9 million in 2016, despite a 68% jump in revenue over the same period.

The electric vehicle and photovoltaic products maker reported a non-GAAP net loss attributable to common shareholders of nearly $1.44 billion on Wednesday. “We expect to generate consistent quarterly positive earnings by sometime in 2018,” the company said.

The table below contains more details on Tesla's performance last year.

Tesla said it expects revenue growth in 2018 to be significantly higher than in 2017, thanks to its planned Model 3 and energy storage products.

Automotive sector

The company continues to target Model 3 production rates of 2,500 by the end of March and 5,000 by the end of June. They say they will achieve their Model 3 gross margin target of 25% with production stabilizing at 5,000 per week.

Model S and Model X deliveries will reach 100,000 by 2018, limited by the supply of 18650 batteries. Tesla will continue to expand its sales network in new markets in 2018, reaching 330 sales stores and service points worldwide by the end of 2017.

Combined orders for the Model S and Model X "grew significantly" last year. Tesla initially worried that the Model 3 might hurt demand for the Model S and Model X, but now the opposite is happening. Traffic to Model 3 showrooms has increased significantly, and orders for the other two models have also increased. The company noted that sales of photovoltaics and Powerwall (home energy storage units) have increased even more.

The automotive division's gross margin was 18.9% in the fourth quarter, down from 22.6% a year ago and 18.3% in the previous quarter.

"As demand outstrips production, we plan to optimize our mix to maximize gross margin," Tesla said.

The Supercharger network added 338 new charging stations in 2017, and there are currently 1,128 stations deployed worldwide.

Tesla's electric car family

Energy and Storage Sector

Tesla deployed 143MWh of energy storage in the fourth quarter of 2017, up 45% year-on-year, while PV deployment fell 20% from the previous quarter to 87MW. Demand for home energy storage remains “very high”, with Powerwall orders consistently outpacing production levels.

The 129MWh energy storage project in South Australia will receive commercial transfer (power sales) approval to customers in the first quarter of 2018.

The production of photovoltaic products has declined as the company closed certain sales channels and focused on high-profit projects. As Powerwall production has not kept up with the growth of orders, the deployment of photovoltaics has also been affected by customers who need photovoltaic + Powerwall systems. Tesla said: "While these factors may continue to have an impact in the short term, we expect photovoltaic products to resume growth later this year."

Tesla Photovoltaic + Powerwall System

The good news is that the company's residential PV sales continue to shift toward cash and loans, which accounted for 54% of residential sales in the fourth quarter compared to leasing. A year ago, the share of cash and loans was 25%. This shift has helped improve the cash flow performance of the PV business.

The Energy and Storage division's gross margin plunged to 5.5% in the fourth quarter from 25.3% in the third quarter, but it was up from 2.7% at the end of 2016. The decline in gross margin compared with the previous quarter was mainly due to one-off factors and a higher proportion of storage products. The typical seasonal decline in photovoltaic power generation led to a decline in winter rental income. Tesla also booked a one-time air freight fee for a battery project in South Australia. Before acquiring SolarCity, the company committed to write down traditional commercial and industrial projects.

Energy and storage gross margins will "improve significantly" in 2018, driven by greater operational and manufacturing efficiencies as well as higher-quality commercial project deployments.

(Original text from: Renewable Energy Express)