Record-breaking car sales drive Tesla profits surge

Tesla Model Y

Tesla

Tesla has reported surging profits, despite shortages of semiconductor chips and congestion at ports hampering production.

The company’s sales grew to $12bn in three months, or PS8.6bn, from $6bn last year, after its US facility was closed.

According to the electric car manufacturer, it shipped 200,000 vehicles in record time.

The report also indicated that the public supported greener vehicles was stronger than ever.

Elon Musk, a billionaire entrepreneur, reports that the company’s profits have soared due to strong sales.

The Model 3 sedan was cheaper than the Model Y, and the profit for the third quarter of this year was $1.1bn.

Tesla updated investors Monday with the following statement: “Public sentiment, support for electric cars seems to have reached a new high point.

We are determined to keep electric cars affordable to everyone and continue to reduce costs.

Tesla stated that Tesla’s ability to produce vehicles in a timely manner throughout the remainder of the year will depend on how many of its key components are available, as demand is at record levels.

There is a shortage of chips

Musk spoke on Monday to financial analysts and said that electric cars are the best way forward.

Musk stated during the conference that there is a global shortage of chips and that manufacturing will depend on the “slowest” part of the supply chain.

He described how he called suppliers late at night to try and resolve any shortages.

According to the results, Tesla vehicles are experiencing longer wait times, particularly in Europe.

The company plans to begin production in its Berlin “gigafactory”, as soon as possible. Despite being plagued with delays, the company claims it is “the most advanced high volume electric vehicle production facility in the world”.

In the interim, it will increase the production of its automobiles at California’s hub.

According to reports, Musk also visited Luton in January. This has sparked rumours that Musk may be thinking about opening a Tesla factory here.

Elon Musk

Getty Images

General Motors and Ford, two other car companies that are giants in the US market, were forced to temporarily suspend their production due to the worldwide shortage of semiconductors.

However, profits at Tesla were affected by investments in cryptocurrency Bitcoin.

The company had previously invested in digital currencies. It stopped accepting Bitcoin payments earlier in the year due to Mr Musk’s concern about the environment impact of Bitcoin mining which consumes huge amounts of electricity.

The company posted a loss of $23 million on Bitcoin investments Monday. However, its chief executive indicated recently that it may accept the same in the future.

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Dan Ives, a Wedbush analyst, said this number was “much lower that many had feared”.

He said that the results were a step in the right direction for Tesla, and there was also “healthy growth” in China where Tesla started manufacturing last year.

However, Mr Ives pointed out that investors are still unsure when the company will be profitable, excluding income from the reselling of credits it receives for exceeding fuel and emissions standards.

It saw $354m in revenue from the sales of these credits between April and June. This is down from $428m last year.

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Publiated at Tue 27 July 2021, 07:49:43 +0000

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