Tesla breaks profit records in the second quarter, but part shortages will limit growth in the coming quarters.

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Analysts’ expectations were greatly exceeded by the company’s financial results.

Despite a series of supply chain issues, Tesla’s business is doing better than ever. For the first time in its short history, the company earned more than $1 billion in quarterly nett income and increased gross margins to 28 percent. The ongoing shortage of chips and other components, however, may have an impact on Tesla’s growth potential at a time when demand for electric vehicles is at an all-time high.

Tesla’s latest financial report is in, and the company was able to surpass Wall Street analysts’ expectations. For the quarter ending in June 2021, the automaker recorded $11.96 billion in revenue, which is almost double the amount recorded during the same period of last year.

This is the eighth quarter in a row where the company managed to stay profitable. Net income for the second quarter was a record $1.14 billion, which is a healthy increase compared to the $104 million recorded in the same quarter of 2020 and nearly double the amount predicted by analysts. Gross margins are also at a record 28.4 percent.

The positive results were achieved thanks to a combination of production cost reductions and increased shipments volume, but they did come at the cost of increased operating expenses, lower regulatory credit revenue (17 percent lower than the previous quarter), and a bitcoin-related impairment of $23 million. The company also repaid $1.6 billion in debt, which further decreased the cash on hand to $16.2 billion.

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Tesla said in a preliminary report earlier this month that it delivered an estimated 201,250 vehicles, but the final number reported today is 201,304. Several factors influenced shipments, most notably the ongoing chip shortage affecting the entire auto industry and slow component deliveries due to port congestion. Tesla anticipates that these will have an impact on deliveries in the coming quarters, potentially limiting growth at a time when global vehicle demand is at an all-time high.

Tesla’s energy business brought in $801 million in revenue, which is a 60 percent quarter-on-quarter increase. The company didn’t say how many Powerwall systems it sold, but CEO Elon Musk has reportedly revealed in court that Tesla would only be able to produce, at best, 35,000 units during the quarter due to component shortages. During the investor call, he noted that the potential addressable market is much larger than that, with an estimated demand “in excess of a million Powerwalls per year.”

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When pressed by investors to provide an update on Cybertruck availability and explain how the company will navigate the company’s persistent supply chain issues, Musk stated that the biggest pain point has been the limited supply of modules that control Tesla’s seatbelts and airbags.

In terms of the Cybertruck, the shareholder letter almost certainly confirms that it has been postponed until 2022, but Musk did not provide a timeline. Tesla’s vice president of vehicle engineering, Lars Moravy, stated that the company is prioritising Model Y production and plans to enter the Cybertruck beta phase later this year, so don’t get your hopes up that you’ll have yours by December.

 

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