The world’s most valuable automaker on Monday reported $1.1 billion in net income in the second quarter results. The latest Tesla earnings not only blew past analyst expectations but also marked the first time the Silicon Valley electric-car maker’s quarterly profit joined the three-comma club. It is one of the few global automakers to have reiterated its 2021 production targets despite the supply chain upheaval due to the ongoing global chip crisis.
“We were able to substitute alternative chips, and then write the firmware in a matter of weeks,” Elon Musk, the co-founder and CEO of Tesla Inc, said. “It’s not just a matter of swapping out a chip; you also have to rewrite the software.”
Tesla Q2 earnings top estimates after record deliveries
The ‘chip swap’ has helped the electric automaker maintain high levels of production, delivering over 201,250 vehicles in the second quarter of 2021. Tesla’s revenue was $11.9 billion in the quarter, including $1.1 billion in profit.
Elon Musk has described Tesla’s profit benchmark as “really an incredible milestone,” while cautioning that the automaker’s growth rate for the rest of the year “will be determined by the slowest part of our supply chain.”
The automaker has set itself an industry leader with a growing portfolio of electric vehicles ahead of traditional players like Ford Motor Co. and General Motors. Analysts have cautioned that the company faces stiff competition from new models being launched by GM, Volkswagen and other companies.
The rise in Tesla earnings doesn’t mean the automaker is immune to the global chip shortages that is hurting its deep-pocketed rivals. The electric automaker disclosed that it will delay the launch of a highly anticipated semi truck AKA the Tesla Semi to some time next year. The Palo Alto, California, company warned that the availability of chips will determine whether it will be able to maintain the production pace so it is able to deliver more than 800,000 vehicles by the end of 2021. The number would be a significant increase from nearly 510,000 vehicles delivered last year, when Covid-19 restrictions during the early stages of the pandemic forced the automaker to temporarily shut down its California factory.
The pandemic uncertainty may have dampened some of the investor response to Tesla’s earnings.
Tesla’s stock gained more than 2% during extended trading on Monday after the Q2 2021 results came out. The electric automaker’s stock has fallen about 25% from its peak price about six months ago.
