Tesla Quarterly Profit Surpasses $1 Billion

Tesla Achieves Record Profitability in Q2 2021

Tesla announced on Monday a substantial net income of $1.14 billion for the second quarter, exceeding analyst predictions. This marks the first instance of the company achieving a quarterly profit exceeding $1 billion when calculated according to Generally Accepted Accounting Principles (GAAP).

The company’s stock experienced a rise of over 2.2% in after-hours trading following the release of these results.

Overcoming Challenges to Deliver Strong Results

Despite ongoing supply chain disruptions and financial losses related to its bitcoin investment, Tesla successfully achieved its eighth consecutive profitable quarter. Operating income reached $1.3 billion, a significant increase compared to the $327 million recorded in the same period last year.

This improvement is attributed to increased production volume and successful cost-reduction strategies.

However, these gains were partially counteracted by rising operating expenses, persistent supply chain issues, a decrease in revenue from regulatory credits, and a $23 million impairment charge linked to its bitcoin holdings.

Impact of Global Supply Chain Constraints

The global shortage of semiconductor chips and port congestion presented notable challenges to Tesla’s operations during the second quarter.

The company anticipates these issues will continue to affect its operations and the pace of vehicle deliveries throughout 2021.

“Component availability will significantly influence the speed at which we can increase our delivery rate for the remainder of the year, given the current high level of global vehicle demand,” Tesla stated in its shareholder update released Monday.

Revenue Growth and Financial Performance

Tesla reported total revenue of $11.96 billion, representing a nearly 100% increase from the $6.04 billion generated in the second quarter of 2020.

This revenue figure also surpasses the $10.39 billion recorded in the previous quarter.

Factset analysts had projected revenue of $11.4 billion and a profit of $600 million.

Automotive Revenue and Gross Margins

Automotive revenue for the second quarter totaled $10.2 billion.

Revenue from the sale of regulatory credits amounted to $354 million, a 17% decrease from the prior quarter and the lowest level in the past four quarters.

Tesla’s automotive gross margins reached a record high of 28.4%.

Significant Year-Over-Year Improvement

Tesla’s Q2 net income of $1.14 billion represents a substantial improvement over the $104 million net income reported during the same period last year, marking an increase of nearly 1,000%.

This record-breaking figure is almost three times greater than the $438 million net income achieved in Q1 2021.

Adjusted EBITDA for the second quarter was $2.24 billion, up from $1.21 billion in the same period of the previous year, a gain of approximately 100%.