KEY POINTS
- Tesla reported record net income of $438 million during the quarter, as well as earnings of 93 cents per share on $10.39 billion in revenue.
- In its earnings release, the company said it has weathered chip shortages that have plagued the auto industry in part by “pivoting extremely quickly to new microcontrollers, while simultaneously developing firmware for new chips made by new suppliers.”
- On an earnings call, CEO Elon Musk said the delayed new version of the company’s Model S sedan will be delivered starting in May 2021, and Model X deliveries will begin in the third quarter of the year.
Tesla posted its first-quarter earnings for 2021 with a 74% increase in revenue. The company’s revenue from sales of cryptocurrency (bitcoin) and regulatory credits reached $518 million during the first three months.
The GAAP net profit was reported to be at $438 million, and the non-GAAP income exceeded an ultimate high of $1 billion. Tesla also has earned 93 cents per share on revenue of $10.39 billion.
The sizable increase was associated with growth in vehicle production and deliveries, energy generation products, bitcoin investment, and other businesses the company own.
A Surge in the Vehicle Unit Sales
According to Tesla CEO Elon Musk, vehicle deliveries for the quarter surpassed expectations in the first quarter with the distribution of 184,800 Model 3 and Model Y cars. Production of Model S Plaid was reported in January, but delivery was scheduled in February.
Musk admitted that there were challenges in producing a refreshed version of the model. Likewise, there were also issues in the supply that will most likely persist this year. Nonetheless, the company aims for 50% vehicle delivery growth this year which is about 750,000 vehicles.
With the exponential growth in vehicle unit sales, Tesla customers call for the expansion of service centres and service fleets, which only grew by 28% and 22%, respectively.
Musk said that the company endured the chip shortages that the auto industry is facing. They relied on new microcontrollers while also improving firmware for chips from new suppliers.
Tesla also focused on AI-based software architecture reliant on cameras rather than radar. The said technology is also vital in attaining a vision-based autonomous system for FSD or Full Self-Driving.
Energy Generation and Storage
Tesla’s revenue for its energy generation and storage business almost grew twice compared to last year’s first quarter.
Musk accounts for the difference with the onset of Covid-19, where the progress of the energy business had slowed down. However, the first-quarter revenue of $595 million for 2021 dipped from 2020’s fourth-quarter revenue amounting to $787 million.
Musk stated that one of the goals of Tesla is to supply solar rooftops and batteries for homes which will serve as a “giant distributed utility” that could provide an additional electrical source in response to increasing power demand.
A Boost from Bitcoin
Tesla revealed selling $272 million of “digital assets” assumed to be bitcoin. By February, the company reported purchasing $1.5 billion in bitcoin and would possibly invest in other cryptocurrencies as well.
In the reported cash flows statement of Tesla for the first quarter, the added profitability of the company was boosted from a sale of bitcoin amounting to $101 million, which contributed to the reduction of their operating expenses.
According to CFO Zachary Kirkhorn, the company seeks to hold bitcoin for an extended period as its liquidity is in its ideal state. He also mentioned that “bitcoin has proved to be a good decision” as he and Elon Musk were looking for an excellent place to store cash.
