TESLA Q3 2020 Update

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HIGHLIGHTS OF Q3 2020

Cash

$5.9B increase in our cash and cash equivalents in Q3 to $14.5B Operating cash flow less capex (free cash flow) of $1.4B in Q3

Profitability

$809M GAAP operating income; 9.2% operating margin in Q3
$331M GAAP net income; $874M non-GAAP net income (ex-SBC) in Q3 SBC expense increased to $543M (driven by 2018 CEO award milestones)

Operations

Record vehicle deliveries, profitability and free cash flow
Buildout of three new factories on three continents continues as planned First step of FSD beta rollout started in Oct. 2020

SUMMARY

The third quarter of 2020 was a record quarter on many levels. Over the past four quarters, we generated over $1.9B of free cash flow while spending $2.4B on new production capacity, service centers, Supercharging locations and other capital investments. While we took additional SBC expense in Q3, our GAAP operating margin reached 9.2%.

We are increasingly focused on our next phase of growth. Our most recent capacity expansion investments are now stabilizing with Model 3 in Shanghai achieving its designed production rate and Model Y in Fremont expected to reach capacity-level production soon.

During this next phase, we are implementing more ambitious architectural changes to our products and factories to improve manufacturing cost and efficiency. We are also expanding our scope of manufacturing to include additional areas of insourcing. At Tesla Battery Day, we announced our plans to manufacture battery cells in-house to aid in our rapid expansion plan. We believe our new 4680 cells are an important step forward to reduce cost and improve capital efficiency, while improving performance.

We continue to see growing interest in our cars, storage and solar products and remain focused on cost-efficiency while growing capacity as quickly as possible.

Consult the full report HERE

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