Tesla makes record profit despite parts shortage and ship delays

Texas News Today

Detroit – Record electric vehicle sales amid a shortage of computer chips and other materials pushed Tesla to the biggest quarterly net profit in history last summer.

The company said on Wednesday that it earned $1.62 billion in the third quarter, surpassing the previous record of $1.14 billion set in the second quarter of this year. The profit was nearly five times more than the $331 million Tesla made in the same quarter a year ago.

Revenue of $13.76 billion from July to September also set a record, according to FactSet, but slightly below Wall Street’s estimate of $14 billion.

Excluding special items such as stock-based remuneration, Palo Alto, Calif.-based Tesla earned $1.86 per share, exceeding analysts’ estimates of $1.62. CEO Elon Musk has announced that it will move its headquarters to Austin, Texas. It is the date of declaration of financial results on Wednesday.


However, some quarterly gains came from selling regulatory credit to other automakers. Tesla earned $279 million in credits during the quarter. Other carmakers buy credits when they do not meet emissions and fuel economy standards.

“A variety of issues including semiconductor shortages, port congestion and rolling blackouts are affecting our ability to keep factories running at full speed,” the company said in a statement to shareholders.

Earlier this month, Tesla said it delivered a record 241,300 electric vehicles in the third quarter, despite dealing with shortages affecting the entire automotive industry. Most automakers reported declining sales in the United States last quarter due to a shortage of chips and others, including General Motors and Ford.

Earlier, Mr Musk said Tesla kept its production line running, mainly by finding chips from alternative suppliers, refactoring and rewriting some of the software in the car to keep all technologies compatible. I did


Third-quarter sales were up 72% compared to Tesla’s 140,000 deliveries a year ago during the same period.

So far this year, Tesla has sold about 627,300 vehicles. This will certainly be higher than last year’s total of 499,550.

Third-quarter sales increased, but average selling prices fell 6% as Tesla sold the cheaper Model 3 and Y, and the cheaper Model S and X.

The decline in the holding value of bitcoin also cost Tesla $51 million in loss costs.

Musk did not appear on this quarter’s conference call with analysts and investors. He used to say that he appears only when he says something important.

As a result, Chief Financial Officer Zachary Kirkhorn and Vice President of Vehicle Engineering Lars Moravi have decided to answer the question.

According to Kirkhorn, the company was able to keep its operating margin (profit before tax minus fluctuations in production costs) to just under 15%.


But Kirkhorn said Tesla could face some future difficulties that could threaten its margins, such as rising commodity prices and labor shortages. Tesla’s biggest cost exposure is nickel, which is used in battery cells, and aluminum, which the company uses in other non-battery components. He said Tesla will also face inefficiencies as it begins production at new plants in Texas and Germany next year.

According to Kirkhorn, the company is already seeing an increase in product costs, resulting in increased prices. Tesla may see more next year. “It’s hard to say, but the volatility and growth is huge,” he said.

Tesla executives also made the first public comments on multiple investigations into the company by US safety regulators. Mr. Morabi said Tesla is cooperating as much as possible.

The Department of Road Safety has opened an investigation into why Tesla’s Autopilot driver assistance system is hitting parked emergency vehicles. Of the dozen accidents that were part of the investigation, 17 were injured and one died.


Security agencies can also better recognize fire trucks and police cars in the dark, as they question why Tesla hasn’t recalled vehicles with Autopilot when updating software on the Internet. NHTSA said the update addresses a security flaw.

Kirkhorn said safety is important to Tesla as the automotive industry has shifted from traditional cars to a more software-oriented one. “Regulators are, of course, interested in understanding how to regulate in this environment, and NHTSA is no exception,” he said. “I am excited to be a partner and to work with all the different regulators.”

Tesla also said in a shareholder statement that construction of a new plant near Austin is proceeding as planned, preparing equipment and “building the first pre-production vehicle.”


Centrally located unlike Tesla’s other assembly plant in Fremont, California, the plant ships Model Y small SUVs and new Cyber ​​Truck pickups to densely populated areas on the East Coast.

Tesla expects to rapidly expand the capacity of its plant and said it expects average annual sales growth of 50% over a “multi-year period.”

“Growth depends on our equipment capability, operational efficiency and supply chain capability and stability,” the company said.

Tesla shares fell 1.3% to $854.60 after trading on Wednesday.


The story has been revised to show that Tesla posted a net profit of $331 million in the third quarter of 2021, instead of $300 million.

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