Q1 2021 highlights Tesla's Q1 2021 Earnings Release
Highlights
Cash
Operating cash flow less capex (free cash flow) of $293M in Q1
Debt and finance lease reduction of $1.2B in Q1
Net cash outflow of $1.2B related to Bitcoin in Q1
In total, $2.2B decrease in our cash and cash equivalents in Q1 to $17.1B
Profitability
$594M GAAP operating income; 5.7% operating margin in Q1
$438M GAAP net income; $1.1B non-GAAP net income (ex-SBC1) in Q1
SBC expense of $614M in Q1
Operations
Model 3 was the best-selling premium sedan in the world3
Production ramp of Model Y in Shanghai progressing well
Record vehicle production and deliveries in Q1
Summary
In Q1, we achieved our highest ever vehicle production and deliveries. This was in spite of multiple challenges, including seasonality, supply chain instability and the transition to the new Model S and Model X. Our GAAP net income reached $438M, and our non-GAAP net income surpassed $1B for the first time in our history.
While the ASP of our vehicles declined in Q1, our auto gross margin increased sequentially, as our costs decreased even faster. Reducing the average cost of the vehicles we produce is essential to our mission. In 2017, as we began production of Model 3, our average cost per vehicle across the fleet was ~$84,000. Due to the launch of new products and new factories and the reduced mix of Model S and Model X, our average cost declined to sub-$38,000 per vehicle in Q1.
About three and a half years into its production, and even without a European factory, Model 3 was the best-selling premium sedan in the world, outselling long-time industry leaders such as the 3 Series and EClass. This demonstrates that an electric vehicle can be a category leader and outsell its gas-powered counterparts. We believe Model Y can become not just a category leader, but also the best-selling vehicle of any kind globally.
First deliveries of the new Model S should start very shortly, Model Y production rate in Shanghai continues to improve quickly and two new factories Berlin and Texas are making progress. There is a lot to be excited about in 2021.
Revenue
Total revenue grew 74% YoY in Q1. This was primarily achieved through substantial growth in vehicle deliveries, as well as growth in other parts of the business. At the same time, vehicle ASP declined by 13% YoY as Model S and Model X deliveries reduced in Q1 due to the product updates and as lower ASP China-made vehicles became a larger percentage of our mix.
Profitability
Our operating income improved in Q1 compared to the same period last year to $594M, resulting in a 5.7% operating margin. This profit level was reached while incurring SBC expense attributable to the 2018 CEO award of $299M in Q1, driven by an increase in market capitalization and a new operational milestone becoming probable.
Year over year, positive impacts from volume growth, regulatory credit revenue growth, gross margin improvement driven by further product cost reductions and sale of Bitcoin ($101 million positive impac, net of related impairments, in "Restructuring and Other" line) were mainly offset by a lower ASP, increased SBC, additional supply chain costs, R&D investments and other items. Model S and Model X changeover costs negatively impacted both gross profit as well as R&D expenses.
Cash
Quarter-end cash and cash equivalents decreased to $17.1B in Q1, driven mainly by a net cash outflow of $1.2B in cryptocurrency (Bitcoin) purchases, net debt and finance lease repayments of $1.2B, partially offset by free cash flow of $293M