Tesla Beats Estimates, Surpasses $1 Billion in Profit for First Time

Mandatory Credit: Photo by Carlos Osorio/AP/Shutterstock (11800454d)Tesla Model Y Long Range is displayed, at the Tesla Gallery in Troy, Mich.
Carlos Osorio/AP/Shutterstock / Carlos Osorio/AP/Shutterstock

Tesla reported a record $1.1 billion in profit for its second quarter and $11.96 billion in revenue, largely beating analysts’ expectations and despite supply chain challenges, including global semiconductor shortages and port congestion, the company said.

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Analysts expected Tesla to report roughly $11.4 billion in revenue and around $600 million in profit, according to The Wall Street Journal. The $11.96 in revenue figure represents a 98% year-over-year increase, “primarily achieved through substantial growth in vehicle deliveries, as well as growth in other parts of the business,” according to the earnings statement.

During an investor call, CEO Elon Musk said that public sentiment toward EVs “is at an inflection point.”

Musk addressed the supply chain issues, noting that “while we’re making cars at full speed, the global chip shortage situation remains quite serious. For the rest of this year, our growth rate will be determined by the slowest part in our supply chain which is a — there’s a wide range of chips that are at various times the slowest part in the supply chain,” according to the transcript of the call.

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In terms of digital assets, Tesla holds $1.31 billion in Bitcoin, down from $1.33 in the previous quarter, as it had “related impairment of $23 million” in bitcoin and other items, according to the earnings release.

In the second quarter of 2021, Tesla also produced and delivered 206,421 vehicles, which represents a 151% year-over-year increase.

Garrett Nelson, vice president of equity research at CFRA Research, said in a note sent to GOBankingRates that CFRA maintains its Hold opinion on Tesla, “which reflects a valuation we consider fair and concerns over rising EV competition.”

As for its outlook, Tesla said it plans to grow its manufacturing capacity as quickly as possible and over a multi-year horizon, expects 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,” according to the statement.

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Andrew Bowering, Chairman of American Lithium and Lithium Developer, tells GOBankingRates that electric vehicle sales are strong and while Tesla’s sales have doubled, profits are “way up” and Tesla is in the lead, “every other car manufacturer is introducing electric cars. This is not a fad and the place for investors to be is in the battery metals space,” Bowering said.

“Tesla itself is investing into lithium exploration and development, and after traveling the world looking at hard rock, brine and sedimentary lithium deposits, they are focusing on the claystones of Nevada. It’s only a matter of time before the sedimentary deposits of Nevada are supplying raw materials for the electric cars of tomorrow,” he added.

Tesla’s stock was down 2% this morning.

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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