Tesla saw its biggest quarterly net earnings in history, the company said on Wednesday, propelled by record electric vehicle sales last summer, amid a shortage of computer chips and other materials.
The company made $1.62bn in the third quarter, beating its old record of $1.14bn, set just in the second quarter of this year. The profit was nearly five times greater than the $331m Tesla made in the same quarter in 2019.
A record-setting revenue of $13.76bn from July through September fell short of Wall Street’s expectations of a little more than $14bn, according to FactSet.
“[Tesla CEO] Elon Musk delivered another terrific quarter as Tesla continues to execute flawlessly”, said Jesse Cohen, senior analyst at Investing.com. “It has done an outstanding job navigating through global supply chain and logistics challenges, weathering the storm significantly better than rival automakers.”
The Palo Alto, California-based electric car company made $1.86 per share, beating analyst estimates of $1.62.
Earlier this month, Tesla said it delivered a record 241,300 electric vehicles in the third quarter, even as it wrestled with the shortages that have hit the entire auto industry.
Third-quarter sales rose 72% over the 140,000 deliveries Tesla during the same period last year. So far this year, Tesla has sold around 627,300 vehicles. That puts it on track to beat last year’s total of 499,550.
“A variety of challenges, including semiconductor shortages, congestion at ports and rolling blackouts, have been impacting our ability to keep factories running at full speed,” the company said in a statement to shareholders. “We believe our supply chain, engineering and production teams have been dealing with these global challenges with ingenuity, agility and flexibility that is unparalleled in the automotive industry.”
While third-quarter sales grew, the average sales price fell 6% because Tesla is selling more of the less-expensive Models 3 and Y and fewer units of the pricier Models S and X.
Musk recently announced plans to relocate the company’s headquarters to Austin, Texas. The company said in its statement that construction of its new factory is progressing as planned and it’s preparing equipment and “fabricating our first pre-production vehicles”.
The factory, which is centrally located as compared to Tesla’s Fremont, California, assembly plant, will send Model Y and new Cybertruck pickups to East Coast population centers.
Tesla said it expects sales to grow an average of 50% annually.
This week, Tesla announced it would provide insurance to its customers in Texas. This service will monitor their driving in real time and lower their insurance premiums based on safe driving history.
In a call with investors on Wednesday, CFO Zachary Kirkhorn thanked the regulators of Texas for allowing Tesla to launch the new insurance product.
“Because our cars are connected, because they are essentially computers on wheels, there is enormous amounts of data available to us to be able to assess the attributes of a driver,” he said.
“So what we have created is a model for predicting the likelihood of collision over time with decent accuracy”, he added, saying that Tesla plans to launch the service in all its markets pending regulatory approval.