The recent Tesla Quarter 3 shareholder letter has, as would be expected, provided us with some new figures worth taking note of and parsing. Of particular note — other than basic revenue and profit figures — are the figures detailing vehicle production and delivery numbers.
The company had its best quarter yet with regard to those two categories, with Quarter 3 2015 seeing 13,091 vehicles produced at the company’s manufacturing facilities, and 11,603 vehicles delivered.
The record-high production numbers are despite the fact that there was a one-week period with no production as manufacturing capacity was expanded via a retooling of the final assembly line — the retooling was to raise throughput by more than 35%, and the new paint shop was finished and commissioned as well. The Model X body assembly line was of course also launched.
The delivery numbers (11,603 units) were slightly above the estimates given during a recent announcement in October.
Amongst the other interesting figures was the $33 million one relating to sales of pre-owned Model Ss. Interestingly, the number of pre-owned units sold outnumbered the number traded in by owners, lowering trade-in unit inventory by 17%.
Here are some more figures, direct from the shareholder letter:
Total Q3 non-GAAP revenue was $1.24 billion for the quarter, up nearly 33% from a year ago, while GAAP revenue was $937 million. Total Q3 gross margin was 25.1% on a non-GAAP basis and 24.7% on a GAAP basis. Automotive revenue was $1.16 billion on a non-GAAP basis, and comprises GAAP Automotive revenue of $853 million plus a net increase of $307 million in deferred revenue as a result of lease accounting. Leasing was more popular in North America during Q3, but the percentage of Tesla direct leasing declined as our leasing partner absorbed more than the sequential increase in leases. Tesla directly leased 494 cars to customers in Q3, worth $45 million of aggregate transaction value.
Q3 Automotive gross margin excluding $39 million of ZEV credit revenue was 23.7% on a non-GAAP basis and 22.8% on a GAAP basis, in line with our expectations. As anticipated, the average selling price of Model S declined slightly with the first full quarter of deliveries of our lower priced 70 kWh variants of Model S. Our warranty reserves were generally in line with the prior quarter, based on our analysis of projected warranty costs. Q3 Services and Other revenue was $84 million (author’s note: this includes pre-owned sales), up 62% from a year ago.
Our operating expenses in Q3 were $363 million on a non-GAAP basis, up 5% from Q2. Research and development expenses declined sequentially as Model X development work diminished during the quarter. GAAP operating expenses were $415 million and include $52 million of non-cash stock based compensation. Stock based compensation increased sequentially as it became highly probable that we will achieve certain operational milestones in the near future and because of grants to new employees.
Our Q3 non-GAAP net loss was $75 million, or a loss of $0.58 per basic share based on 129 million basic shares, while our Q3 GAAP net loss was $230 million or a loss of $1.78 per basic share. Both figures include a $15 million loss, or almost $0.12 per basic share, related mostly to unrealized losses from revaluation of our foreign currency holdings and finished goods inventory held by our foreign entities. Q3 weakness in the Norwegian krone, Canadian dollar and Chinese yuan had the largest impacts.
Tesla’s cash reserves at the end of Quarter 3 were $1.4 billion — representing a jump of $275 million, partly owing to a recent equity offering. Capital expenditures totaled $392 million for the quarter — this included the repayment of $50 million in credit. Other capital expenditures were mostly associated with manufacturing capacity expansion (Model X) and the ongoing development of the Gigafactory.
The company’s core business was nearly break-even during the quarter as far as cash generated goes (prior to capital expenditures, of course).
→ Related: Tesla Q4 Plans & Expectations