Tesla Inc. financed just 8% of first quarter leases and has no plans to offer leasing on its most affordable vehicle yet — the model 3 — this year, the company reported Wednesday.
In January, Tesla “adopted a new revenue recognition standard,” which now only reports lease volume originated by Tesla itself, rather than adding in bank partners that offer leases on the vehicles.
To that end, Tesla reported $2.3 billion in operating lease vehicles outstanding, down from $6 billion in combined Tesla and bank financing the same period the year prior.
“We received $112 million in net funding from our vehicle lease warehouse lines, automotive asset-backed notes, auto tax equity fund and collateralized lease borrowings,” the report also stated.
Additionally, Tesla is not offering leasing on its Model 3 line “as we continue to focus on cash sales,” the company said.
The electric car manufacturer has struggled to meet production goals for the Model 3. In the first quarter, it produced 9,766 Model 3 vehicles and delivered 8,182. Tesla was expected to produce 2,500 Model 3s per week by the end of the first quarter but only reached 2,270.
“After all-time record orders in Q3 and Q4 2017, we had our highest ever Q1 for orders. With demand exceeding supply, we are making considerable progress with margin improvement,” the report said.
The OEM has relied on used cars to satiate consumer demand. Servicing and other revenues increased 37% during the quarter to $263 million primarily due to used-car sales, the company reported.
Back in June 2017 during the annual shareholders meeting and prior to the launch of the Model 3, Elon Musk, the chief executive of Tesla, had said the used-section of the website was going to receive “a lot more attention” especially if the car was four-years-old. “It’s got a lot of mileage, [so] you can buy a Model S for as much as a Model 3,” Musk said at the time.1 - Reader Likes This Post