Tesla Sales Surge 98%; Company Boosts Margins On Its Less-Costly Electric Cars
- ByStartupStory | July 27, 2021
Tesla Inc posted a bigger second-quarter profit than expected on Tuesday thanks to sharply higher sales of its less-expensive electric vehicles, as it raised prices to boost its margins on them. Tesla CEO Elon Musk, however, said a global chip shortage that led to temporary factory shutdowns for the automaker, remains serious, and offered no details on the timing of its Cybertruck and next-generation batteries. For the first time since late 2019, Tesla profits did not rely on sales of environmental credits to other automakers, a sign of increasing financial health for the manufacturing operation. Tesla boosted its performance by cutting features it said were unused or unneeded and raising U.S. vehicle prices. Shares of the world’s most valuable automaker rose 1.5% in extended trade.
In a call with investors and analysts, Tesla executives said that volume production growth will depend on parts availability, and Musk cautioned the shortage of semiconductors will continue. Musk said Tesla expects to launch production this year of the Model Y SUV at factories under construction in Texas and Germany. Tesla said it has delayed the launch of its Semi truck program to 2022 to focus on starting factories and due to limited availability of battery cells and other parts this year. Musk did not give a timeframe for when Tesla will start mass production of its new-generation batteries and its much-anticipated Cybertruck.
He said Tesla has a backup plan of using its existing 2170 batteries, adding that its battery cell suppliers would double production next year. Musk said revenue jumped to $11.96 billion from $6.04 billion a year earlier, when its California factory was shut down for more than six weeks due to local lockdown orders to fight the pandemic. Analysts had expected revenue of about $11.3 billion, according to IBES data from Refinitiv. Excluding items, Tesla posted a profit of $1.45 per share, easily topping analyst expectations for a profit of 98 cents per share. The company’s operating income rose with volume growth and cost reduction, which offset higher supply chain costs, lower regulatory credit revenue and other items including $23 million in losses on investment in cryptocurrency bitcoin.
“Tesla impressed with its numbers, as most of its revenue came from vehicle sales,” Jesse Cohen, senior analyst at Investing.com, said. Musk said he “most likely will not be on earnings calls” going forward to discuss financial results with investors and analysts. These calls have been a colorful quarterly ritual Musk has used for discourses on Tesla technology, or to fire back at rivals or critics.
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