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October 17, 2019

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With full year of Model X, Tesla’s revenues soar

Tesla Factory Sneak Peek

Rich Pedroncelli / AP

Tesla CEO Elon Musk discusses the company’s new Gigafactory Tuesday, July 26, 2016, in Sparks. It’s Tesla Motors biggest bet yet: a massive, $5 billion factory in the Nevada desert that could almost double the world’s production of lithium-ion batteries by 2018.

Tesla saw a sizeable charge in total revenues tied to its operations in 2016.

Revenue from operations totaled more than $7 billion in 2016, up $2.95 billion or 72 percent for the year compared to 2015, according to the company's 10-K Securities and Exchange Commission filing this month.

Automotive sales revenue increased $2.16 billion, or 63 percent, to $5.59 billion in 2016. This is a stark jump over 2015’s year-end total of $3.43 billion, which was up from $2.87 billion at the end of 2014. The increase is mainly attributed to a 55 percent increase in vehicle deliveries, a total of 50,700 vehicles.

The increase in vehicle volume is primarily due to a full year of Model X deliveries last year, as well as ramped up production and sales of Model S.

Additionally, there was an increase in the average selling price of 6.1 percent, largely tied to the introduction of Model X — which are higher-priced vehicles compared to Model S.

Production numbers are expected to soar higher, as Tesla’s Model 3 vehicle production is set to start this year at its Northern Nevada Gigafactory.

“Our Model 3 program is on track to start limited vehicle production in July and to steadily ramp production to exceed 5,000 vehicles per week at some point in the fourth quarter and 10,000 vehicles per week at some point in 2018,” Tesla Chief Executive Officer Elon Musk said in a shareholder letter in the fourth quarter.

The Model 3 is Tesla's cheapest, most basic model, which generated more than 400,000 pre sale orders last year.

In addition, there was an increase of $133.4 million to $302.3 million of the sale of regulatory credits from the year ended Dec. 31, 2015, to the corresponding period in 2016. These increases were partially offset by negative impact from the movement of foreign currency exchange rates, according to Tesla.

On the leasing side, revenue increased $452.4 million to $761.8 million in 2016, a 146 percent spike compared to 2015. The increase was largely tied to an 83 percent increase in cumulative vehicle deliveries under leasing programs and programs with a resale value guarantee from 2015 to 2016.

Tesla also recognized $112.6 million in automotive leasing revenue upon the expiration of resale value guarantees.

Revenue tied to service and other areas jumped $177.4 million to $468 million during 2016, a 61 percent increase compared to 2015. The jump is largely because of an of a $117.4 million increase in pre-owned vehicle sales; Tesla received more trade-ins and saw a rise in maintenance service revenue of $66.6 million as the company’s vehicle fleet continues to expand.

Energy generation and storage revenue also increased in 2016 largely because of the acquisition of rooftop solar company SolarCity.

Tesla’s revenue increased $166.9, wtih $84.1 million credited to the addition of revenue from SolarCity and $82.8 million in energy storage revenue due to ramped-up energy storage sales.The completion of multiple utility scale projects including Southern California Edison Mira Loma substation contributed to Tesla’s energy generation and storage revenue increase as well.

Despite the rise in revenue, the company lost just under $675 million last year.

Tesla wants to raise $1 billion in new capital by selling stock and five-year convertible notes. The company says the offerings will strengthen its balance sheet and reduce risks from scaling up to produce the $35,000 Model 3 electric car starting in July.

The company plans to offer $250 million worth of common stock and $750 million in notes due in 2022. Underwriters can buy another 15 percent, which would bring the total proceeds to about $1.15 billion. Tesla says Musk will buy $25 million of the stock.

The Associated Press contributed to this report.

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