Tesla today released its financial report for Q1 2020. Tesla reported an EPS of $1.24 and $5.9 billion of revenue for Q1 2020, surpassing Wall Street's estimates.
Q1 2020 was the first time in company's history that they achieved a positive GAAP net income in the seasonally weak first quarter. Despite global operational challenges, Tesla was able to achieve a better first quarter in both production and supply. Despite the inefficiencies associated with the temporary suspension of production and supplies in many places, their gross margin remains high.
Tesla reported that at Gigafactory Shanghai a further increase in volumes led to a significant improvement in the profitability of locally produced Model 3 cars. Their Gigafactory Shanghai ramp is progressing according to plan. Due to better than expected progress, Tesla believe Model 3 will achieve a production rate of ~ 4,000 / week (or ~ 200k / year extrapolated run rate) by mid-2020.
The company continues to invest heavily in its roadmap, including the improvement of technology, as well as the localization of production in Shanghai and Berlin.
Tesla recently finished the land preparation phase at Giga Berlin-Brandenburg and are about to break ground on the construction phase of this project. Based on the current progress, the company are on track to start the first Model Y deliveries from Gigafactory Berlin in 2021.
Tesla Model Y
In early Q1, Tesla began production of Model Y in Fremont, using a combination of new production lines as well as shared capacity with Model 3. Their simplified and scalable approach to manufacturing is starting to take effect. Tesla were able to build more Model Y vehicles in its first quarter of production than in the first two quarters of Model 3 in 2017. Model Y production also exceeded the first quarter of production of Model 3 in Shanghai, demonstrating continued improvements in program execution.
Tesla expect that production of both Model Y in Fremont and Model 3 in Shanghai will continue to ramp gradually through Q2. They are continuing to build capacity for Model Y at Gigafactory Berlin and Gigafactory Shanghai and remain on track to start deliveries from both locations in 2021.