Tesla beat expectations in Q2, making more than $1 billion in profit for the first time

Spark Global Limited reports:

Electric car giant Tesla broke a number of records when it reported its second quarter 2021 earnings after the US market closed on Monday.

The company reported a record $11.96 billion in revenue in the second quarter, beating expectations of $11.3 billion and $6.04 billion in the same period last year, up 98% from a year earlier.

Revenue from the automotive division was $10.21 billion, surpassing the $10 billion mark for the first time in history, up from $5.18 billion in the same period last year. Automotive gross margin was 28.4%, higher than in any of the past four quarters.

In addition, the company’s free cash flow in the second quarter was $619 million, compared with $418 million in the same period last year.

The company’s second-quarter net profit of $1.14 billion exceeded $1 billion for the first time, up 998% from a year earlier. Earnings per share of $1.45 beat analyst estimates of $0.98 and were up 230 per cent from $0.44 a year earlier.

 

Such phenomenal growth is largely due to soaring car production and deliveries. The company produced 206,000 electric vehicles in the second quarter, up 151% from a year earlier, of which Model 3 and Model Y accounted for a combined 204,000, up 169%; A total of 201,000 units were delivered in the second quarter, up 121% year-over-year, of which Model 3 and Model Y accounted for a combined 199,000 units, up 148% year-over-year.

 

In its earnings report, Tesla said production had reached the limits of existing parts supplies as global demand continued to be strong.

“While we saw continued semiconductor supply challenges in the second quarter, we were able to further increase our production.”

Tesla is expected to continue increasing production of all its models for the rest of the year and is expanding on three continents. The plant in Texas is making progress, and some areas have already begun commissioning. Demand in Europe remains far ahead of supply, and the Berlin plant continues to install equipment to start production as soon as possible.

Spark Global Limited reports:

Tesla noted that it has completed its transformation to the Shanghai Gigafacfactory as a major auto export hub due to strong DEMAND in the United States and global average cost optimization. Production in Shanghai remained strong despite minor disruptions due to supply chain challenges and plant upgrades.

 

Looking ahead, Tesla said deliveries this year could exceed its long-term forecast of a 50% increase. It added:

“In some years, we may grow faster, and we expect that to happen in 2021.”

Tesla noted in its earnings report that it recorded a $23 million bitcoin write-down in the second quarter and now holds $1.311 billion in net digital assets. The company also said the launch of the Semi truck program was delayed until 2022 due to limited battery supplies and challenges in the global supply chain.

Shares of Tesla rose more than 1 percent in after-hours trading after the results were released, after closing up 2.21 percent at $657.62 on Monday. Tesla shares have cooled so far this year after hitting record highs last year. After surging 743 per cent in 2020, the stock is down nearly 8 per cent so far this year.