Tesla Motors (TSLA, Financial) continues to perform well in the market with more electric car revenue than the rest of the companies combined in 2014. If we analyze the Tesla performance from 2012 to 2014, its non-GAAP revenue grew by around 800%. In 2014, the company increased the number of stores and service centers by almost 40%. The company achieved the production target of 35,000 Model S vehicles in 2014.
Despite the fact that the U.S. dollar has continued to strengthen by around 7% against the euro in 2015, the company expected that it would sustain a non-GAAP gross margin of 26% in 1Q 2015. This will happen due to stabilizing production to improve manufacturing efficiencies. In 4Q 2014, non-GAAP revenue was $1.1 billion up by 44% compared to last year.
In 2014, around 55% of new Model S vehicles were delivered in North America. Tesla Motors North American Model S orders increased year over year whereas deliveries were about flat as the company directed vehicles into Asia/Pacific markets, which represented around 15% of the deliveries. The remaining 30% of the deliveries went to European markets as the delivery volume doubled compared to last year.
The average selling price of Model S appreciated during the 4Q 2014, but the quantum of increase was lower than the expectation because of late introduction of P85D. Tesla motors reported 4Q 2014 gross margin of 26.7% on a non-GAAP basis. The gross margins were under stress due to lower average selling cost and cost of goods sold factor.
The operating expenses in 4Q 2014 were $297 on a non-GAAP basis, which was up 15% compared to 3Q 2014, as this was a record quarter of global expansion for Tesla Motors. The company opened during 4Q 2014 with its 21 new sales service locations and 125 superchargers locations. In 2014, engineering work continued on Model X and All Wheel Drive Dual Motor.
Tesla Motors in 4Q 2014 reported a net loss of $16 million or in LPS terms $0.13 per share. In 2014, the company reported net income of $0.14 per share on a non-GAAP basis.
In 2015, Tesla Motors expect to deliver around 55,000 Model S and X vehicles, which represent more than 70% increase compared to 2014 deliveries. Around 40% of the deliveries are scheduled for the first half of 2015. 1Q 2015 production is estimated to be around 10,000 vehicles as the current quarter is the short quarter compared to 4Q 2014 due to approximately a week of factory down time to allow the workers to rest and carry out tooling upgrades. In 2015, the company would focus on cars in transit to Europe and Asia, which they plan to deliver 9,500 vehicles in 1Q 2015, which shows a growth of 47% compared to last year.
Tesla Motors would continue to improve Model S profitability, and the company expects to achieve a 30% gross margin on Model S by the end of 2015 despite the fact that currency rates remain at current levels. However, the gross margins improvements will be affected by the introduction of Model X. Tesla Motors is confident that it would grow Model X gross margin similar to Model S.
As 2015 continues to escalate, analysts are hoping to see some rapid changes in the financial growth of Tesla for them to report. Still. With the performance of the company so far, investors are not complaining and are looking forward to more monetary rewards on their investment.
