Tesla reported earnings for the second quarter after Bell Monday, and it’s a blow on both the upside and bottom line. After the hours of trading, the shares rose by around 2%. Here are the results.
- Merits: $ 1.45 expected versus 98 cents per share adjusted, according to Refinitiv
- Revenue: $ 11.96 billion versus an expected $ 11.30 billion, according to Refinitiv
The company reported GAAP net income for the quarter of $ 1.14 billion, topping $ 1 billion for the first time. In the year-ago quarter, net income was $ 104 million.
Total automotive revenue was $ 10.21 billion, of which only $ 354 million, about 3.5%, came from regulatory loan sales. That’s a lower number for credits than any of the previous four quarters. The gross margins of the automotive industry were 28.4% higher than in any of the previous four quarters.
Tesla has already had deliveries (the closest to sales) of 201,250 electric vehicles and a production of 206,421. reported Total number of vehicles for the quarter ended June 30, 2021.
The company also reported $ 801 million in revenue from its energy businesses, including solar photovoltaics and energy storage systems for households, businesses and utilities, an increase of more than 60% from the previous quarter.
While Tesla doesn’t disclose how much energy storage it sells per quarter, CEO Elon Musk said in court in recent weeks that the company could only produce 30,000 to 35,000 in the current quarter, blaming the delay on the chip for bottlenecks.
Tesla also reported $ 951 million in services and other income. The company now operates 598 branches and service centers as well as a mobile service fleet with 1,091 vehicles, only 34% more than in the previous year. This contrasts with an increase in vehicle deliveries of 121% compared to the previous year.
An impairment loss of $ 23 million related to the value of its Bitcoin holdings was recorded as an operating expense under Restructuring and Other.
The company’s cash position decreased approximately 5% from the last quarter to $ 16.23 billion. The decrease was “mainly driven by net debt and finance lease repayments of $ 1.6 billion.
Trade payables – the amount of money Tesla owes suppliers and other service providers – increased 13.7% from the previous quarter to $ 7.56 billion.
During the quarter, Tesla faced consumer backlash in China, recalls in China and the United States, and delayed deliveries of the high-performance version of its flagship sedan, the Model S Plaid, among other things.
Institutional and private investors asked for updates on when the company plans to begin commercial production of its Cybertruck and custom battery cells, and how Tesla will deal with the ongoing parts shortages and rising raw material costs that Musk previously complained about.
Parts shortages have been persistent for Tesla and other automakers. On its shareholder deck, Tesla said it had postponed the start of the semi-truck program until 2022.
On Monday’s call for shareholders, Musk said a “big fight this quarter” is getting enough modules to control the airbags and seat belts in Tesla vehicles. The lack of supply limited the company’s production in both Fremont, California and Shanghai.
Musk also said many fans are asking why Tesla doesn’t just make its own chips to avoid shortages. He said Tesla will solve supply chain problems with suppliers and laughed, “It’s not like you can just build a chip factory.”
Because Tesla uses many of the same semiconductors and battery cells in cars as they do in energy storage products, Musk said the company has reduced its production of powerwalls and its megapack battery systems for use in power plants are sold out by the end of next year.
Musk said he believes there is likely a demand for “over a million powerwalls a year” and an unspecified but huge amount of utility megapacks as the move to renewable energy continues. “Solar and wind are intermittent and, by their very nature, really require battery packs to provide a steady flow of electricity,” he said.
As a strategy to address its supply chain problems for both automobiles and energy storage products, Musk said Tesla would “overshoot” cell supplies for vehicles, and if there was an excess it could channel that supply into making powerwalls and mega-packs.
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Lars Moravy, Vice President of Vehicle Engineering at Tesla, said cybertruck production should begin at Tesla’s new plant in Texas in late 2021. Musk stressed that this would be limited production at first and he anticipates that production to high volume will prove challenging due to difficulties with the vehicle’s unique design. Tesla said on its shareholder deck that the production of Cybertruck will follow production of the Model Y in Texas.
When asked when Tesla will open its Supercharger DC fast charging stations for drivers of other non-Tesla electric vehicles, Musk and Drew Baglino, Senior Vice President of Powertrain and Energy Engineering, said the company’s goal is to expand its charging network to that extent that this is possible so drivers will no longer have to wait to recharge their vehicles on the road.
Musk also took a moment to prepare shareholders for the fact that he will “no longer be standard” talk, let alone lead, of Tesla earnings talks after this quarter. He said he would speak at annual shareholders’ meetings.