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Record deliveries of electric cars during the period allowed Elon Musk’s company to garner earnings of $1.1 billion in the quarter
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Musk described the profit benchmark as “really an incredible milestone”
US electric carmaker Tesla reported its first-ever quarterly profit above $1 billion Monday as it reiterated its 2021 production targets despite supply chain upheaval.
Record deliveries of electric cars during the period allowed Elon Musk’s company to garner earnings of $1.1 billion in the quarter, up from $104 million in the year-ago period as revenues nearly doubled to $12.0 billion.
Musk described the profit benchmark as “really an incredible milestone,” but while cautioning that the growth rate the rest of the year “will be determined by the slowest part of … our supply chain.”
Besides a dearth of semiconductors that has plagued automakers around the world, Musk also cited scarcity of lithium and other raw materials as a wildcard.
Musk has been a pacesetter in the industry, unveiling a growing slate of electric vehicles ahead of other traditional industry players. But analysts have cautioned the company faces increasing competition from new models being launched by General Motors, Volkswagen and other companies.
Tesla reiterated its 2021 forecast, saying: “Over a multi-year horizon, we expect to achieve 50% average annual growth in vehicle deliveries. In some years, we may grow faster, which we expect to be the case in 2021.”
The language is identical to that in the prior quarter, although Tesla alluded repeatedly to supply chain problems.
Musk said on a conference call with analysts and investors that the semiconductor problem “does seem like it’s getting better, but it’s hard to predict.”
He also warned that the company’s supply chain can be harmed “if anything goes wrong anywhere on earth.”
Tesla said it made progress on greenfield factories in Germany and in the state of Texas, which are on track to produce Model Y vehicles later in 2021.
However, the company pushed back the timeframe for launching its Semi truck program to 2022, citing the limited availability of battery cells and other supply issues.
Musk also said he expects slow progress on the futuristic Cybertruck, where the ramp-up “will be difficult” because of the vehicle’s unconventional architecture.
Tesla’s results included $354 million in revenues tied to regulatory credit sales to other carmakers under policies encouraged to boost EV (electric vehicle) use.
In the year-ago period, Tesla garnered $428 million in revenues from these credits.
Profits were dented slightly by $23 million decline in the value of Bitcoin assets.
Karl Brauer, analyst at iSeeCars.com, said Tesla managed to offset higher material costs with lower costs elsewhere in the operation.
“Tesla’s numbers, beating estimates by a healthy margin, confirm strong global demand for EVs continues, enough to more than offset Tesla’s near-term challenges,” Brauer said in an email.
Tesla’s surge in earnings comes as US EV sales topped 100,000 in a quarter for the first time last quarter, according to a report from Cox Automotive that highlighted brisk sales for EVs made by Ford, General Motors and Volkswagen.
Tesla remains “the dominant force in the EV market and will be for some time,” said Cox, adding that “Musk’s magic brand represents a smaller slice of a growing pie.”
Tesla’s US EV market share fell to 64 percent from 83 percent a year earlier, Cox said.
But Musk suggested he welcomed other EVs, elaborating on a recent statement that Tesla would open up its charging network to EVs made by other automakers. The machines will be accessible to those who download a smartphone application and purchase an adaptor.
“Our goal is to support the advent of sustainable energy,” Musk said. “It is not to create a walled garden and use that to bludgeon our competitors.”
Opening the network will also create another revenue stream for Tesla. The company plans to charge more to access the chargers at rush hour than at times of lower use, Musk said.
Shares rose 1.0 per cent to $664.23 in after-hours trading.