On Wednesday, Tesla released its financial results for the fourth quarter of 2019. For the final three months of the year, Tesla brought in $6.4 billion in automotive revenues, a 1 percent increase on Q4 2018. Total revenues for the company during the quarter were $7.4 billion, a two percent rise from the same period the year before. Total revenues for the year were $24.6 billion, an increase of 14 percent compared to 2018. Once generally accepted accounting principles were applied, that translates to a quarterly profit of $105 million, a 25 percent decline from Q4 2018. (Regulatory credits brought in $133 million in Q4 2019.) Free cash flow increased by 11 percent compared to the same time period the year before to just over $1 billion.
The results come on the back of record deliveries of the Model 3 sedan. Between September and December of last year, the company built 86,958 Model 3s and delivered 92,620, a year-on-year increase of 42 percent and 46 percent, respectively. Tesla is also keeping less inventory on hand; globally, the company was at 11 days of sales for Q4 2019, a drop of 42 percent year on year.
However, Tesla noted in a letter to investors that gross profits “were essentially flat” as volume growth and manufacturing efficiency and cost reductions were offset by a decrease in average sales price and more leased cars. Deliveries of the Models S and X continue to decline year-on-year, falling by 29 percent.
54MW of solar panels were installed in Q4 2019 (a drop of 26 percent year-on-year), and a hefty 530MWh of battery storage were deployed, a massive 136 percent increase compared to Q4 2018. Despite February’s kerfuffle over closing stores, the company ends 2019 with 429 stores and service centers (an increase of 13 percent year-on-year). And there are more supercharger stations than ever before—1,821 compared to 1,421 at the end of 2018.
Tesla says it is ahead of schedule with the Model Y crossover. It says that the production ramp for this vehicle began at the Fremont, California, factory in January of this year and that deliveries will begin by the end of Q1 2020. In Shanghai, production of battery packs has begun ramping up. In 2020, Tesla says total vehicle deliveries “should comfortably exceed 500,000 units,” but that production will outpace deliveries. The company also promises to grow solar and storage by 50 percent. Tesla also says it should be profitable going forward, although new model launches may affect that.
All of this is extremely good news for CEO Elon Musk, who signed a lucrative new contract in 2018. The share price, which was already soaring, has now brought the company’s market cap well above the $100 billion threshold. As long as annual revenues remain above $20 billion, he will be awarded another 1 percent of the company.