Tesla total non-GAAP revenue was $1.1 billion for the first quarter, up 55% from a year ago, while GAAP revenue was $940 million.
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Tesla achieved a Q1 total company gross margin of 28.2% on a non-GAAP basis and 27.7% on a GAAP basis.
Starting this quarter, Tesla's income statement reflects the new classifications of revenues and costs o
f revenues to segregate ou
new vehicle business from company's other business activities.
"Automotive" revenue and related costs now reflect activities related to the sale or lease of new vehicles including regulatory credits, data connectivity and Supercharging.
"Services and other" revenues and related costs include activities such as powertrain sales, service revenue, Tesla Energy and pre-owned Tesla vehicle sales.
Automotive revenue was $1.06 billion on a non-GAAP basis, and is comprised of GAAP Automotive revenue of $893.3 million plus a net increase of $163.7 million in deferred revenue and other long-term liabilities as a result of lease accounting. 10,045 Model S vehicles were delivered in Q1, in line with company's April announcement of approximately 10,030 deliveries.
The average selling price of Model S increased slightly during the quarter, reflecting a full quarter of sales of P85D and the introduction of 85D. This mix improvement was partially offset by the effect of the strong dollar, which negatively impacted both company's average selling price and thus revenue by slightly more than 3% from the prior quarter.
As in previous quarters, Tesla offered small discounts when selling vehicles used for either marketing or as service loaners. These discounts were consistent with last quarter.
Q1 Automotive revenue included $66 million of total regulatory credit revenue, of which $51 million came from the sale of ZEV credits. In Q1, Tesla directly leased 592 cars to customers, which was worth $63 million of aggregate retail value.
Q1 Automotive gross margin excluding ZEV credits was on plan at 26.0% on a non-GAAP basis, and 25.0% on a GAAP basis. The 330 basis points of sequential improvement in non-GAAP gross margin was driven by lower manufacturing costs and richer mix, offset partially by the strong dollar, expedited shipping costs related to port delays and an increase in warranty reserves of about $200 per car.
Q1 Services and other revenue was $46.6 million, up 47% from a year ago. This includes $22 million of powertrain sales to Daimler and $20 million of service revenue. Q1 Services and other gross margin was negative 3.2%, as compared to 12.1% last quarter.
This sequential reduction in gross margin was primarily driven by a planned price reduction for powertrain sales to Daimler.
Tesla improved its operational efficiency in Q1, achieving record deliveries and developing new products while managing to grow operating expenses at a slower rate than expected. Company's operating expenses in Q1 were $324 million on a non-GAAP basis, up 9.1% from Q4, and $363 million on a GAAP basis.
Company's Q1 non-GAAP net loss was $45 million, or a loss of $0.36 per basic share based on 125.9 million basic shares, while company's Q1 GAAP net loss was $154 million or a loss of $1.22 per basic share. Both figures include a $22 million loss, or $0.17 per basic share, related to mostly unrealized losses from revaluation of company's foreign currency holdings due to the strong dollar.
Cash and cash equivalents were $1.51 billion at the end of the quarter, down $396 million sequentially, as capital expenditures were $426 million in the quarter. Capital expenditures were primarily for the capacity expansion and tooling associated with Model X and all-wheel drive vehicles, as well as the Gigafactory.
Company's Q1 GAAP net cash outflow from operations was $132 million primarily due to the $78 million in cash inflows from vehicle sales to company's bank leasing partners which the company is required to classify as a financing activity, and a $63 million increase in inventory from customer-configured cars that were in transit for deliveries in Q2.
During the quarter, Tesla closed on a $100 million warehouse line in connection with company's direct leasing program, and drew down $78 million of the line by quarter end. Tesla anticipate closing on additional financing lines in the coming months.
In Q2, Tesla expects to produce about 12,500 vehicles, representing a 12% sequential increase. Tesla plans to deliver 10,000 to 11,000 vehicles in Q2, and the company are still on track to deliver approximately 55,000 Model S and X cars in 2015.
As part of its strategy to optimize operational efficiency while scaling for higher deliveries, Tesla is shipping cars using less expensive rail, rather than by truck, to more regions in the United States and Canada.
Also, Tesla is now producing cars based on a uniform regional production mix throughout the quarter. This enables a more stable cadence of deliveries and in turn improves customer satisfaction while reducing cost. Both of these actions should lead to an increase of in-transit customer-configured finished goods inventory.
In Q2, Tesla expects to directly lease about the same percentage of cars that Tesla did in Q1. As always, the company will use lease accounting for these cars leased directly through Tesla even in company's non-GAAP financial results, as such treatment is consistent with the cash
collected on these transactions.
Tesla expects to sell about $15 million of company's regulatory credits in Q2, including about $5 million of ZEV credit sales. ■