Tesla has posted record quarterly earnings for the three months to March, driven by continuing and increasing demand for its electric vehicles and despite a global chip supply shortage and decreasing profits per vehicle.
Sales revenue increased 75% year-on-year to $US10.39 billion ($A13.32 billion), up from $US5.99 billion ($A7.68 billion) a year ago, and gross profits were up by 79%, despite the fact that increasing numbers of Model 3 and Model Y EVs in Tesla’s sales mix, and a pause in production of the premium Model S and Model X meant the average profit per vehicle declined.
And the EV maker’s sales outlook is on a positive beat also. In its earnings report it said that it plans to grow its manufacturing capacity “as quickly as possible,” and it expects to achieve 50% average annual growth in vehicle deliveries. “In some years we may grow faster, which we expect to be the case in 2021.”
In Tesla’s earnings call on Monday (US time), CEO and co-founder Elon Musk underlined the success of the Model 3 globally, overtaking mainstays in the premium car segment.
“The Model 3 became the best selling premium car in the world,” said Musk.
“In fact, it is the best selling luxury sedan of any kind in the world. The BMW 3 series was for a long time the best selling premium sedan, it’s been exceeded by the Tesla Model 3,” said Musk.
“And this is only three and a half years into production, and with just two factories.”
“For the Model 3 to be outselling its combustion engine competitors is quite remarkable,” he said, noting that Tesla is now selling around 500,000 Model 3s each year (annualised).
But the Model will also be eclipsed by the Model Y, says Musk.
“We’ve seen a real shift in customer perception of electric vehicles, and our demand is the best we’ve ever seen. We think the Model Y will be the best selling vehicle of any kind in the world,” said Musk.
“It’s more likely than not in 2022 the Model Y is the best selling car or truck of any kind in the world,” he said (we note that in the US, a truck in this context refers to a ute).
Tesla currently has just two factories on line but by the end of 2021 will have doubled its number of gigafactories, the term it uses for its EV and battery manufacturing plants.
Both its Berlin and Texas gigafactories will be outputting production vehicles by the end of 2021, with volume ramps in 2022.
“There is a lot to be excited about in 2021,” the company wrote in its earnings report.
The Model Y will be made at both the new factories. There was no mention of the Cybertruck, which will also be produced at the Texas plant from late 2021.
The factory refit to begin making the refreshed Model S and Model X took longer than expected, but demand is expected to increase once more with output of 2,000 S and X units per week planned which could go as high as 2,400 a week.
Driving this, it is expected, will be the Plaid version with tri-motors, new battery pack, new drivetrain, new infotainment system and updated exterior as well as the controversial “yoke” steering wheel.
Semi production will also commence in 2021, Musk noted, an indication that Tesla’s plan to reroute cobalt and nickel supply away from its Shanghai-made Model 3s by using LFP batteries made by CATL is going to plan.
Bridie Schmidt is lead reporter for The Driven, sister site of Renew Economy. She has been writing about electric vehicles since 2018, and has a keen interest in the role that zero-emissions transport has to play in sustainability. She has participated in podcasts such as Download This Show with Marc Fennell and Shirtloads of Science with Karl Kruszelnicki and is co-organiser of the Northern Rivers Electric Vehicle Forum. Bridie also owns a Tesla Model 3 and has it available for hire on evee.com.au.