Electric car maker Tesla announced its fourth quarter earnings on Wednesday, and in the process assuaged any fears that last year’s high-profile car fires would be a long-term drag on the company.
Tesla lost big in the third quarter of 2013 when those fires were top of mind for consumers, but the end of 2013 finished strong with record sales of 6892 Model S vehicles. That means Tesla hit the 25% growth target it set for itself in Q3, but it’s being even more confident going forward. The exact amount of money made or lost depends on who you ask. Using non-GAAP standards, Tesla had a $46 million profit, but lost $16 million under GAAP guidelines.
In Tesla’s case, that means the resale value guarantee (RVG) is a substantial drag on the “official” number. When you finance a car from Tesla, the company offers to buy the vehicle back between the 36th and 39th month of the loan at a guaranteed value — 50% of the purchase price. It’s a generous offer, and one that makes a dent in Tesla’s profits.
The Q4 results were certainly strong, but Tesla also feels the trend will continue upward. The car maker expects to increase vehicle delivery growth by 55 percent during 2014. That would take Tesla from 600 cars per week to more than 1000. It’s good news for fans of electric vehicles in general and Tesla in particular, but things are going to pick up even more when Tesla starts shipping cars to China this spring.
Tesla lost big in the third quarter of 2013 when those fires were top of mind for consumers, but the end of 2013 finished strong with record sales of 6892 Model S vehicles. That means Tesla hit the 25% growth target it set for itself in Q3, but it’s being even more confident going forward. The exact amount of money made or lost depends on who you ask. Using non-GAAP standards, Tesla had a $46 million profit, but lost $16 million under GAAP guidelines.
In Tesla’s case, that means the resale value guarantee (RVG) is a substantial drag on the “official” number. When you finance a car from Tesla, the company offers to buy the vehicle back between the 36th and 39th month of the loan at a guaranteed value — 50% of the purchase price. It’s a generous offer, and one that makes a dent in Tesla’s profits.
The Q4 results were certainly strong, but Tesla also feels the trend will continue upward. The car maker expects to increase vehicle delivery growth by 55 percent during 2014. That would take Tesla from 600 cars per week to more than 1000. It’s good news for fans of electric vehicles in general and Tesla in particular, but things are going to pick up even more when Tesla starts shipping cars to China this spring.
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