Tesla profits surge on higher auto sales despite chip crunch
New York (AFP) – Tesla's third-quarter profits more than quadrupled on sharply higher sales despite a global semiconductor shortage that has plagued the auto industry, according to results released Wednesday.
Elon Musk's electric car company posted a record profit of $1.6 billion for the three-month period, as revenues surged 57 percent to $13.8 billion compared to the year-ago period.
Tesla also delivered a record 241,391 vehicles during the period, with sales significantly ramping up in North America and China.
The results suggest Tesla's output has been less affected by the global shortage of semiconductors than some rival carmakers that have shuttered factories or cut production.
However, the company said chip shortages, as well as congestion at ports and rolling blackouts, "have been impacting our ability to keep factories running at full speed."
"We believe our supply chain, engineering and production teams have been dealing with these global challenges with ingenuity, agility and flexibility that is unparalleled in the automotive industry," Tesla said in its news release.
Tesla notched somewhat lower revenues on the sale of EV regulatory credits to other automakers compared with the year-ago period. The company also reported a $51 million impairment related to bitcoin.
But profit margins expanded, even as the company alluded to uncertainties amid the lingering supply chain challenges.
"We continue to run our production lines as close to full capacity as conditions allow," Tesla said in the news release. "While sequential growth remains our goal, the magnitude of growth will be determined largely by outside factors."
The electric carmaker said new factories in Germany and the US state of Texas remain on track.
Musk was on hand earlier this month at the unveiling of Tesla's "gigafactory" near Berlin, its first European plant that is expected to ultimately produce some 500,000 cars a year.
The nearly-completed facility has been criticized by some NGOs in Germany, but Tesla said in Wednesday's press release that it expects to receive final permit approval by the end of the year.
Another gigafactory in Austin, Texas is "progressing as planned," Tesla said. Musk announced earlier this month that the company is shifting its headquarters to Texas from California.
Tesla is nearing assembly of its first production line cars in Austin and Berlin, but the "hardest work lies ahead" in ramping up output, chief finance officer Zack Kirkhorn said on an earnings call.
Tesla has completed a shift to its factory in Shanghai being its main hub for export vehicles, freeing up other plants to provide more cars for Europe and North America, according to executives.
The company's stated goal is to get on pace to produce millions of cars annually.
"There appears to be quite a profound awakening of desirability for electric vehicles," Kirkhorn said.
"It's called us a little bit off guard. Folks want to buy an electric car and folks want to buy a Tesla right now. It's very exciting for us."
Tesla said it is expanding new "full self-driving" technology to more drivers based on "demonstrated driver safety."
But earlier this month, US highways safety regulators demanded details from Tesla on issues with the new autonomous system, building on a previously announced probe.
Executives on the call downplayed regulatory inquiries, saying they were to be expected with "cutting edge" technology and that they were cooperating "as much as possible."
CFRA Research analyst Garrett Nelson said the strong results were already priced into Tesla shares, describing the trading action as "muted."
Moreover, the company's statement that the magnitude of its growth "'will be determined largely by outside factors' gives investors pause," Nelson said.
Tesla shares dipped 1.3 percent to $854.40 in after-hours trading. Shares have risen more than 25 percent in the last two months.
© 2021 AFP