The following Tesla Motors (TSLA - Get Report) conference call took place on May 6, 2015, 05:30 PM ET. This is a transcript of that earnings call:

Company Participants

• Jeff Evanson; Tesla Motors; VP of Global IR
• Elon Musk; Tesla Motors; Chairman & CEO
• Deepak Ahuja; Tesla Motors; CFO
• Jeffrey Brian Straubel; Tesla Motors; CTO

Other Participants

• Dan Galves; Credit Suisse; Analyst
• John Lovallo; BofA Merrill Lynch; Analyst
• Andrea James; Dougherty & Company; Analyst
• Colin Lang; UBS; Analyst
• Rod Lache; Deutsche Bank; Analyst
• Colin Rusch; Northland Capital Markets; Analyst
• Adam Jonas; Morgan Stanley; Analyst
• Brian Johnson; Barclays Capital; Analyst
• Ryan Brinkman; JPMorgan; Analyst
• Trip Chowdhry; Global Equity Research; Analyst
• Patrick Archambault; Goldman Sachs; Analyst
• Brad Erickson; Pacific Crest Securities; Analyst

Operator:

Good day ladies and gentlemen, and thank you for standing by. Welcome to the Tesla Motors First Quarter 2015 Financial Results Q&A conference call.

(Operator Instructions)

As a reminder, today's conference may be recorded. Now, my pleasure to turn the floor over to Jeff Evanson. Sir, floor is yours.

Jeff Evanson (VP of Global IR):

Thank you, [Hughie], and good afternoon everyone. Welcome to Tesla's first quarter Q&A webcast. I'm joined today by Elon Musk, Tesla Chairman and CEO; JB Straubel, our CTO; and Deepak Ahuja, Tesla's CFO. We announced our financial and operational results today in a shareholder letter that is available at the same link as this webcast, And a replay of the webcast will be available later today at the same link.

The shareholder letter includes GAAP and non-GAAP financial results, as well as reconciliations between the two. Our non-GAAP measures add back deferred revenue and related expenses for cars delivered where cash has been or will very soon be collected. These non-GAAP results also exclude stock-based comp and non-cash interest expense. Revenues and costs associated with cars leased directly through Tesla are treated the same in our GAAP and non-GAAP financial information.

During our call we'll be discussing our business outlook and making other forward-looking statements which are based on our predictions and 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 10-K filed with the SEC. Now, Hughie, if we could please have the first question.

QUESTIONS & ANSWERS

Operator:

(Operator Instructions) D Our first phone question will come from the line of Dan Galves with Credit Suisse.

Dan Galves (Analyst - Credit Suisse):

If we assume Model S volume of 50,000 in 2015, deliveries need to average over 14,000 per quarter in Q3 and Q4. What's the biggest challenge to get there, and do you have order rates today that support that level of volume in the back half?

Elon Musk (Chairman & CEO):

Yes, that's about right. Actually, with Model X production ramping up quite heavily in Q4, depending upon how that ramp goes, and obviously it's difficult to predict that with perfect clarity, but our volume essentially doubles in Q4. Depending upon how the ramp goes, I want to emphasize, sometimes people don't totally appreciate is that there are several thousand unique parts in a car. And if even one of those parts is not available for any reason, then you cannot ship -- you cannot scale production.

Essentially the production ramp goes according to the unluckiest and worst-performing supplier or part of Tesla. That said, we do expect to see a significant ramp in Q4 for the X. And have something that is may be as much as 2 times of the quarters in Q4.

As far as demand for that, we do not see that being a problem. There are huge advance orders for the X, and we see a steady climb in demand for the S.

Dan Galves (Analyst - Credit Suisse):

Okay. Got it. Just a follow-up. You've improved the Model S a whole lot in the last couple of years. Does that make it easier to launch Model X at a high quality level? Does it allow you to move engineering and design resources toward Model 3 faster than you moved resources to Model X?

Elon Musk (Chairman & CEO):

Yes. In the case of the X, if the X ended up being a lot more different than the S than we originally anticipated, so that the he development took a lot longer and we were distracted solving all sorts of issues with the S during that time, which made it difficult for us to allocate engineering resources to the X when there were issues to be solved with the S. I think we'll do a lot better with the X.