For a better experience please change your browser to CHROME, FIREFOX, OPERA or Internet Explorer.
Tesla makes over $1billion quarterly profit for the first time ever

Tesla makes over $1billion quarterly profit for the first time ever


Electric vehicle maker, Tesla has posted a record $1.14 billion in profits during the second quarter despite supply chain challenges and losses resulting from its bitcoin investment.

The huge profit reported marks the first time the company has exceeded $1B of GAAP net income since its establishment.


The net income reported was a whopping 1000% growth from the $104 million recorded during the same period last year and nearly three times more than the $438 million generated during the previous quarter.

According to Tesla, the profit was possible due to the increase in total revenue to $11.96 billion during the quarter. This is nearly a 100% increase from the $6.04 billion generated in Q2 2020.

A breakdown shows that its automotive revenue was responsible for more than 90% of its income, with revenue pegged at $10.2 billion for the quarter.

Tesla makes over $1billion quarterly profit  for the first time ever

Interestingly, only $354 million of that revenue is derived from regulatory credits which, according to some analysts, has been helping the company pose profits.

Profits from credits dropped 17% from the $518 million generated during the previous quarter. The record profit despite the drop in credit dumps water on the analysis that Tesla depends on the credits for profit.

Credits are given to carmakers that build and sell environmentally-friendly vehicles. In a push to reduce carbon emissions, governments introduced incentives like credits for automakers to develop electric vehicles

Another factor that contributed to the company’s record quarter is its drop-in expenses. During the quarter, expenses dropped from $1.62 billion to $1.57 billion.

Similarly, quarter-end cash and cash equivalents fell to $16.2 billion in the second quarter. Tesla says the decrease was driven mainly by net debt and finance lease repayments of $1.6 billion, partially offset by free cash flow of $619 million.

Tesla makes over $1billion quarterly profit  for the first time ever

Over 200,000 vehicles produced

Despite the supply chain challenges, especially global semiconductor shortages, Telsa was still able to produce over 200 thousand vehicles during the quarter.

This is 20,000 more than the previous quarter and a whooping 151% increase from the 82,000 produced during the same period last year.

Notably, Tesla restarted the production of the Model S/X after stopping production during the first quarter. However, its production numbers declined due to product updates and china manufactured vehicles.

Going forward, Tesla expects that the growing vehicle demand will continue to affect component supply and therefore strongly influence the rate of delivery for the second half of the year.

The latest earning results pushed Tesla’s shares up more than 2.2% in after-hours trading. Currently, it stands at $657.62 up 2.21%.


If you’d like to get featured on our Entrepreneur Spotlight, click here to share your startup story with us.


SUBSCRIBE

Get latest Technology news, reviews, business-related content with a deliberate emphasis on the African narrative and insightful analysis in Nigeria – straight to your inbox.



Comments




leave your comment


Your email address will not be published. Required fields are marked *

Top