Tesla Inc. has filed its annual report, committing to paper its promises and expectations for the year and putting an initial price tag on last year’s going-private saga and restructuring.
As part of its cash and non-cash expenses last year, Tesla TSLA, -0.73% listed $36.6 million due in part to layoff-related costs, $55.2 million for restructuring its energy business, and $30.1 million spent on the settlement and legal expenses related to Chief Executive Elon Musk’s going-private tweet and ensuing entanglements.
A large part of the document was standard procedure, but here are some of the highlights of the 198-page document filed with the Securities and Exchange Commission Monday.
Model 3 highlights
The document mentions the Model 3 more than a hundred times, and a large chunk of the year’s additions pertain to the mass-market sedan that Tesla hopes to offer for $35,000.
That price promise makes appearances on the document, but Tesla is still saying that price level will be reached in an unspecified point in the future.
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“We are now embarking on the delivery of Model 3 in international markets and are focusing on lowering manufacturing costs while continuing to increase its production rate,” Tesla said.
The company said the Model 3 and its drive units are being produced “at high volumes” and highlighted the sedan was the best-selling premium vehicle in the U.S. in 2018.
Tesla reiterated it expects to grow Model 3 production to a “sustained rate” of 7,000 vehicles a week by the end of 2019.
Including the Shanghai factory currently under construction, that rate would go up to 10,000 a week and eventually an annualized output of more than 500,000 Model 3 vehicles “sometime between the fourth quarter of 2019 and the second quarter of 2020,” Tesla said, depending on when the Shanghai factory comes on line.
Musk touted the production numbers in a tweet Tuesday afternoon:
Tesla made 0 cars in 2011, but will make around 500k in 2019
— Elon Musk (@elonmusk) February 20, 2019
Future vehicles
Tesla slightly tweaked its language around its next vehicles, specifying that among the all-electric vehicles it will introduce in the future are the Model Y, the Semi freight truck, a pickup truck, and a new version of the Tesla Roadster.
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The Model Y is believed to be a compact SUV, a segment heavily favored among U.S. consumers. In Monday’s document, the company reiterated its promise that the production ramp for the Model Y will be “significantly faster” than the Model 3’s and cost less as the future compact SUV will share about 75% of its components with the Model 3.
Musk has spoken about the pickup truck in the past, notably during a November interview with Recode, in which he kept mum on details about the pickup truck but said it will be “a really futuristic like cyberpunk, ’Blade Runner’ pickup truck” made with “a lot of titanium.”
Solar ‘gaining momentum’
Tesla said that residential solar “is gaining momentum,” and that it intends to ramp up production of its Solar Roof this year. It also plans on introducing financial services, presumably direct loans, for future Solar Roof customers.
It also said, however, that it has been installing solar roofs “at a slow pace” as it learns more about the design and installation processes.
Tax credits are phasing-out
U.S. tax credits for Tesla EVs have been reduced by half to $3,750 in the first half of 2019 and will be cut further to $1,875 in the second half, but Tesla said it does not expect that phasing-out to have a “meaningful impact” on its sales in the long run.
“We believe that this phase-out likely pulled forward some vehicle demand into 2018 and could create similar pull-forwards in 2019 before each further step reduction in the federal tax credit,” Tesla said. Tesla’s vehicles offer “a compelling proposition even without incentives,” it said.
No ongoing investigations find wrongdoings
Tesla said that aside from the settlement with the SEC in connection with Musk’s going-private tweet, “no government agency in any ongoing investigation has concluded that any wrongdoing occurred.”
It followed that statement, however, with the usual warning that it could be subject to liabilities and other sanctions in the future if the SEC, the Justice Department, or any other government agency were to pursue legal action.
Tesla shares have lost 8% in the past 12 months, which contrasts with gains of around 1.8% for the S&P 500 index. SPX, +0.15%
