US electric automaker Tesla Inc on Monday reported its first-ever quarterly profit above US$1 billion as it reiterated this year’s production targets, despite supply chain upheaval.
Record deliveries of electric vehicles during the period allowed Elon Musk’s company to garner earnings of US$1.1 billion in the quarter, up from US$104 million in the year-ago period as revenues nearly doubled to US$12 billion.
Musk described the profit benchmark as “really an incredible milestone,” while cautioning that the growth rate the rest of the year “will be determined by the slowest part of ... our supply chain.”
Photo: Bloomberg
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.
Tesla reiterated its forecast for this year, 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 said 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 this year.
However, the company pushed back the timeframe for launching its Semi truck program to next year, 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 US$354 million in revenues tied to regulatory credit sales to other automakers under policies encouraged to boost electric vehicle use.
In the year-ago period, Tesla garnered US$428 million in revenues from these credits.
Profits were dented slightly by a US$23 million decline in the value of bitcoin assets.
Tesla’s surge in earnings comes as US electric vehicle sales last quarter topped 100,000 in a quarter for the first time, according to a report from Cox Automotive that highlighted brisk sales for electric vehicles made by Ford Motor Co, General Motors Co and Volkswagen AG.
Tesla remains “the dominant force in the EV [electric vehicle] market and will be for some time,” Cox said, adding that “Musk’s magic brand represents a smaller slice of a growing pie.”
Tesla’s US electric vehicle market share fell to 64 percent from 83 percent a year earlier, Cox said.
However, Musk suggested he welcomed other electric vehicles, elaborating on a recent statement that Tesla would open up its charging network to electric vehicles made by other automakers. The machines would be accessible to those who download a smartphone application and purchase an adapter.
“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 would 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.
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