Electric carmaker Tesla Inc. (NASDAQ: TSLA) reported record net income of $438 million in Q1 on $10.39 billion in revenue, slightly short of analyst expectations for revenue. The company provided no updates on the long-delayed Semi tractor, saying only it is “in the background.”
First-quarter revenue nearly doubled the $5.99 billion from a year ago. Earnings per share of 93 cents exceeded the expected analyst consensus of 80 cents. Per-share earnings in the year-ago quarter were 23 cents. Tesla has been profitable for seven consecutive quarters. Much of the gain comes from selling emission credits to companies trying to meet air-quality standards.
Tesla is focused on making more electric cars, including the top-selling Models 3 and Y that accounted for almost all of the 184,800 deliveries in the quarter.
More batteries, please
It is also looking for help from suppliers that make battery cells as it works on its own advanced 4680 cell whose energy density is expected to increase driving range between charging. Full production of the advanced cells are 12-18 months away, CEO Elon Musk said.
“This is not being done to the exclusion of suppliers. It is done in conjunction with suppliers. We have good relationships with CATL, Panasonic and LG,” he said on an earnings call Monday evening. “Supply us with as much as you possibly can. Provided the price is affordable, we will buy everything you can make.”
The three companies are among the largest battery cell producers globally. Musk said he expected supplier output of batteries to double in 2022.
Fast profit from Bitcoin
Tesla’s widely reported purchase of $1.5 billion in Bitcoin cryptocurrency paid off almost immediately. The company sold 10% of its stake for a $272 million, booking a $101 million profit as a reduction in operating expenses.
“Bitcoin seemed at the time to be a good decision, a good place to stash money not needed right away and make some returns on that,” Chief Financial Officer Zach Kirkhorn said. “We are long-term holders and watching the space closely.”
Tesla accepts deposits and allows customers to purchase its vehicles with Bitcoin.
Chip shortage
Like all automakers, Tesla suffered from the global semiconductor shortage.
“Q1 had some of the most difficult supply chain challenges we’ve ever had in the history of Tesla,” Musk said. “The chip shortage is a huge problem.”
Kirkhorn said the “landscape [around supply chain issues] is improving.”
Automotive gross margins grew by more than 1 percentage point to 26.5%. Cost-cutting helped expand profitability even with practically no production of higher-priced S and X models that are being replaced this year by new versions.
Tesla said in its letter to shareholders Monday that it still plans 50% average annual growth in vehicle deliveries over a multiyear horizon. Musk said 2 million Teslas will be on the road next year.
What about the Semi? Not much
Production of the Model Y continues to ramp up at Tesla’s Shanghai Gigafactory. New factories in Austin, Texas, and Berlin are expected to be at full production in 2022.
The Austin Gigafactory is expected to eventually produce the Semi. Tesla has hundreds of orders for the truck, first shown as a prototype in 2017. It was originally slated for production in 2019, but that date has slipped several times.
Media reports suggest the company could build a small number of Semi models at the Tesla gigafactory in Sparks, Nevada, to fulfill an order for Pepsi Co.’s Frito-Lay distribution center in Northern California. Frito-Lay said as much in a recent sustainability report touting its environmental gains.
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