Tesla’s earnings call transcript for Q1 2014 is presented below. Daniel Benton, Philippe Laffont, and John Griffin are among hedge fund managers with large Tesla positions. Here is Tesla’s complete earnings conference call transcript for Q1 2014:
Operator: Good day, ladies and gentlemen, and welcome to the Tesla Motors Q1 2014 Financial Results Q&A call. At this time, all participants are in a listen only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time.
I would now like to turn the call over to your host Jeff Evanson with investor relations. Please go ahead.
Jeffrey K. Evanson: Thank you Patrick, and good afternoon, everyone. Welcome to Tesla’s first quarter financial results and question-and-answer webcast. I’m joined today by Elon Musk, Tesla’s Chairman and CEO; and Deepak Ahuja, Tesla’s Chief Financial Officer, as well as J.B Straubel our Chief Technology Officer.
We announced first quarter results today in our quarterly shareholder letter; this letter is available at the same link as this webcast. Also a replay of this webcast will be available later today at the same link.
Please note, that certain financial measures used on this call such as revenue and income are expressed on a non-GAAP basis and have been adjusted to exclude the effect of lease accounting on Model S sales, with the residual value guarantee and charges related to stock based compensation. Our GAAP results and reconciliations to non-GAAP measures can be found in that shareholder letter.
During the course of this call, we may discuss our business outlook and make other forward-looking statements. Such statements are predictions based on management’s expectations as of today. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in our most recent Form ten-K filed with the SEC.
So we are ready to take questions. Aaa, so please press star one to ask a question. We are going to try to limit the call to about forty five minutes, so please be respectful of other callers by limiting your questions. So Patrick lets have the first question please.
Operator: Our first question comes from Brian Johnson with Barclays. Your line is opened.
Brian A. Johnson - Barclays Capital: Yes, good afternoon. Amm, I know Elon you’re back from China. Just want to get a sense of what the order book in China is looking for? Amm, how much of a contribution that’s going to make to your especially second-half implied delivery targets? And then, you know, do you have to get beyond Beijing or Shanghai this year in order to amm grow in China – grow further in China?
Elon Musk: Well I really don’t think we’ve got amm, any kind of demand challenge in China, in fact I…I…I was blown away by my visit to China at the level of interest and enthusiasm for Tesla, and the amount of goodwill that I encountered from people at all levels, from the government, from amm people in industry aaa and sort of consumers in general. Amm, and I’m really optimistic for how things will go there.
Amm, we are trying to expand our service centers and Superchargers coverage as fast as possible in China. Amm, it’s not…it’s not to generate sales, it’s in order to be able to deal with the cost that we deliver in market. So we are really doing very few stores in China. Our focus is ninety percent plus on…on service centers and…and Superchargers. Amm and then I think we’ll…we’ll actually have to…to limit the amount of cost we send to China; otherwise it would starve the rest of the world production.
So I mean that’s really how we view things there. I did mentioned that we elected to do local vehicle production in China in three or four years, although I should mention the good will existed before I said that, goodwill wasn’t a function of that, amm…amm but that will be for vehicles amm…aaa delivered to the local market in China and perhaps to some aaa surrounding countries.
Aaa and actually, just to be clear that wouldn’t mean shifting any production from aaa…from California amm that would be something that California is going to reach its max production amm it makes sense for us to start looking at local…local country factories. Amm, and I think we would be looking at one in Europe as well amm…aaa just to – I mean these really end up minimizing our logistics cost because shipping two tons of metal over long distances is not very efficient. So it’s just a sensible thing to do is to…to try to satisfy local demand with local production over time.