Test Q2 Profit: Both the top and bottom lines of Tesla’s earnings report came in beyond expectations. After hours, shares gained roughly 2 percent. You can see the results here.
- Earning: Adjusted earnings per share of $1.45 were more than predicted, according to Refinitiv.
- Revenue: $11.96 billion in revenue vs. $11.30 billion anticipated by Refinitiv.
This is the first time that the company’s net income has exceeded $1 billion.
The quarter ending June 30, 2021, Tesla has already recorded 201,250 electric car deliveries (its closest approximation to sales) and 206,421 total vehicles produced.
The company suffered a backlash from Chinese buyers throughout the quarter, recalls in China and the US, and delays in delivery of its high-performance Model S Plaid car.
When Tesla plans to begin commercial production of its Cybertruck and custom battery cells, and how it plans to deal with ongoing parts shortages and rising raw material costs, institutional investors are eagerly awaiting updates on the two new factories the company is building in Austin and near Berlin.
A few weeks ago, Musk told a court that Tesla’s demand for its Powerwall backup batteries for households was about 80,000. Tesla does not publicly reveal how many energy storage units it sells each quarter. At best, he said, the business might deliver 35,000 units during the current quarter, blaming the lack of chips for this shortfall.
Investors will be scrutinising Tesla’s bottom line for the impact of bitcoin holdings and sales, if any, as well as regulatory credits.
Tesla confronts competition on both fronts as additional automakers build and sell their own battery electric vehicles throughout the world.
Several jurisdictions require automakers to sell a specific number of electric, hybrid or other zero emission vehicles in order to sell their automobiles there (also known as ZEVs). State environmental regulatory credits aren’t the only source of environmental regulatory credits.
In order to remain compliant, companies who do not sell ZEVs yet, or do not sell them in substantial quantities, will typically acquire credits from automakers that do sell ZEVs. It doesn’t have to keep credits it earns since it only sells ZEVs and can sell them before they expire because it doesn’t have to keep them. In the regulatory credit market, pricing and sales data are usually opaque.
Tesla has been able to record profits in most cases because of the credits it has received. Tesla announced a net income of $104 million during the second quarter of 2020, amidst the rising Covid19 epidemic. This marks the company’s first full year of GAAP profits on revenue of $6.04 billion. Of that amount, around $428 million was credited to the federal government through regulatory credits.