Tesla set a new profit record with its third quarter performance. The achievement came despite the average selling price falling by 6%. The EV maker offset that decline due to cost reductions outpacing the drop in average prices.
The company reported net income of $1.6 billion on revenue of $13.8 billion for the quarter, increases of 389% and 57% respectively. It’s operating income came in at $2 billion for a margin of 14.6%, which is also a new record.
“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 noted in a presentation for 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. We would like to thank everyone who helps advance our mission.”
Unprecedented results during unprecedented times
The new high-water marks came despite a difficult environment for the total industry, although EV sales are up more than 90% through the first nine months of the year.
The company acknowledged the strong demand for battery-electric vehicles, and Tesla is still the top seller of those vehicles in the U.S. It’s top two sellers, the Model Y and Model 3, hold the same position in U.S. sales of electric vehicles. The company sells more of those two than the rest of the top 10 — combined.
“We believe the more vehicles we have on the road, the more Tesla owners are able to spread the word about the benefits of EVs,” the company said.
The company delivered 241,391 vehicles during the quarter just ended, which is a 73% increase year over year. The vast majority of that are the previously mentioned Model Y and Model 3, accounting for 232,102 vehicles.
Numbers likely to go higher as production capacity rises
While the company is pushing its current operations to the limit — one throttled by outside forces such as materials shortages — the company’s getting ready to bring two of its new facilities online soon.
“Gigafactory Texas is progressing as planned. We are in the process of commissioning equipment and fabricating our first pre-production vehicles,” the company said, adding Giga Berlin-Brandenburg is “on track” as equipment testing is currently happening and a final approval to begin production from governmental authorities is expected “before the end of the year.”
With those two locales coming up to full production, the company expects significant growth for the near future.
“Over a multi-year horizon, we expect to achieve 50% average annual growth in vehicle deliveries,” officials said. “The rate of growth will depend on our equipment capacity, operational efficiency and the capacity and stability of the supply chain.
“We continue to target our first Model Y production builds in Berlin and Austin before the end of the year. The pace of the respective production ramps will be influenced by the successful introduction of many new product and manufacturing technologies in new locations, ongoing supply-chain related challenges and regional permitting. We are making progress on the industrialization of Cybertruck, which is currently planned for Austin production subsequent to Model Y.”