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Sep 30, 2020
Tesla Q3 2020 Earnings Report
Tesla had a record quarter driven by vehicle deliveries and free cash flow.
Key Takeaways
Tesla's Q3 2020 was a record quarter with substantial growth in vehicle deliveries, resulting in a 39% year-over-year increase in total revenue. The company achieved a GAAP operating income of $809 million, representing a 9.2% operating margin. Cash and cash equivalents increased by $5.9 billion quarter-over-quarter to $14.5 billion, driven by a capital raise and free cash flow generation.
Record vehicle deliveries, profitability, and free cash flow were achieved.
Buildout of three new factories on three continents continues as planned.
First step of FSD beta rollout started in October 2020.
Cash and cash equivalents increased by $5.9B in Q3 to $14.5B.
Revenue by Segment
Forward Guidance
Tesla aims to deliver half a million vehicles in 2020 and expects its operating margin to continue to grow over time. Model Y capacity is being built at Gigafactory Shanghai, Gigafactory Berlin and Gigafactory Texas, with deliveries expected to begin in 2021. Tesla Semi deliveries will also begin in 2021.
Positive Outlook
- Capacity installed to produce and deliver 500,000 vehicles this year.
- Sufficient liquidity to fund product roadmap and capacity expansion.
- Operating margin expected to grow over time.
- Model Y capacity being built at multiple Gigafactories.
- Tesla Semi deliveries will begin in 2021.
Challenges Ahead
- Achieving the 500,000 vehicle delivery goal has become more difficult.
- Target depends on increases in Model Y and Shanghai production.
- Improvements in logistics and delivery efficiency are needed.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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