What Factors Drove Tesla’s Revenues Higher in 3Q17?

Jitendra Parashar - Author

Nov. 2 2017, Updated 1:24 p.m. ET

Tesla’s 3Q17 revenues

In 3Q17, Tesla (TSLA) reported GAAP (generally accepted accounting principles) revenues of $3.0 billion, which reflected an increase of 30% YoY (year-over-year) from $2.3 billion in revenues in the corresponding quarter of 2016. With this, TSLA managed to meet analysts’ 3Q revenue estimates. The company’s 3Q17 revenues were ~7% higher than its GAAP revenues of $2.8 billion in the previous quarter this year.

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Since the third quarter last year, Tesla has been reporting its earnings primarily in GAAP financial figures. The difference between GAAP and non-GAAP revenues is due to differential accounting treatments to lease. In GAAP, lease revenues are recognized throughout the life of the lease unlike in the case of non-GAAP.

Vehicle deliveries growth

In 3Q17, Tesla delivered 26,137 car units to customers, a YoY increase of about 5.3% from 24,821 vehicle units delivered in the third quarter last year. The company delivered 25,915 units of Model S and Model X, and 222 units of Model 3. The total car deliveries also reflected 18.7% positive growth quarter-over-quarter.

With these stronger quarter-over-quarter and YoY car deliveries, TSLA managed to generate a revenue of $2.4 billion from the automotive segment, about 10% higher on a YoY basis and up 3% quarter-over-quarter.

Higher revenues from other segments

Tesla’s energy generation and storage segment revenues also rose to $317 million in 3Q17 from $286 million in the previous quarter this year, which reflected an increase of about 11% quarter-over-quarter. Tesla’s annual car production is still just a fraction of the annual vehicle production of mainstream automakers (XLY) including Ford (F), General Motors (GM), and Toyota (TM).

Read on to the next part to learn about Tesla’s 3Q17 gross margins.


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