Tesla Inc charged through a summertime auto industry sales slump in the US to post stronger-than-expected net earnings for the third quarter.
The electric vehicle and solar panel maker on Wednesday said that it made US$331 million, or US$0.27 per share, for its fifth-straight profitable quarter.
Excluding special items such as stock-based compensation, Tesla made US$0.76 per share, beating Wall Street estimates of US$0.57. Revenue from July through September was US$8.77 billion, a record that passed analysts’ expectations of US$6.3 billion, according to FactSet.
Photo: Ritchie B. Tongo, EPA-EFE
However, as in previous quarters, the company relied heavily on US$397 million it earned from selling electric vehicle credits to other automakers so they could meet government fuel economy and pollution regulations.
The earnings were driven by a 44 percent increase in global deliveries for the quarter, which came as US auto sales overall fell 9.7 percent from a year ago due to consumer fears about an economy hit hard by the COVID-19 pandemic.
Shares of the Palo Alto, California, company rose 3 percent in extended trading on Wednesday. Its results were released just after the markets closed. Tesla’s shares are worth about five times what they were at the start of the year, accounting for a split.
The third-quarter profit was more than double the same period a year ago, when Tesla made US$143 million. Its string of profitable quarters reversed years of losses. Through the first nine months of this year, Tesla made US$451 million and appears headed toward its first annual profit.
On Oct. 2, Tesla reported that it had delivered 139,000 sports utility vehicles (SUVs) and sedans from July through last month, compared with 97,000 deliveries during the same period a year ago.
Analysts said China, where the economy is recovering, was a major source of sales for Tesla.
In a letter to investors on Wednesday, Tesla said it is still on target to deliver a half-million vehicles this year, something promised earlier by CEO Elon Musk.
The company said hitting the target “has become more difficult” and depends on increases in production of the Model Y small SUV and at the company’s plant in China.
Tesla said it should have sufficient cash to fund its future products, which include the Cybertruck pickup and a Semi, as well as its long-term expansion plan.
The company is adding Model Y production capacity at its Shanghai plant and is building new factories in Germany and near Austin, Texas. Deliveries from the new factories are planned for next year, it said.
On a conference call, Musk said Tesla has sent out full self-driving software to a small number of owners for testing on public roads.
The system would be released more widely by the end of the year, he said.
Musk said that Tesla is starting slowly to be safe, gathering data on rare traffic cases that cannot be anticipated.
“Weird corner cases, only reality can get you that.” he said. “We need to train the system on this corner-case situation, look for examples.”
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