Tesla Quarterly Net Profit Surpasses $1 Billion

Electric Vehicle Sales Revenue Increases
Quarterly Record High Performance...10 Times Growth Compared to Previous Year

[Asia Economy Reporter Yujin Cho] Tesla, the US electric vehicle company led by Elon Musk, recorded its highest-ever quarterly earnings in the second quarter despite the global vehicle semiconductor supply chain crisis.

On the 26th (local time), Tesla announced that its net profit for the second quarter reached $1.14 billion (approximately 1.3167 trillion KRW), more than 10 times the net profit of $104 million in the same period last year. This is the first time Tesla’s quarterly net profit has exceeded $1 billion.

During the same period, revenue reached $11.96 billion, nearly doubling compared to $6.04 billion in the same period last year. Tesla’s Q2 revenue surpassed Wall Street estimates of $11.3 billion compiled by financial information firm Refinitiv.

Tesla stated, "Despite the global shortage of vehicle semiconductor chips, raw materials, and logistics disruptions, both Q2 profits and revenue exceeded Wall Street expectations."

Based on strong sales in China and other markets, Tesla achieved $10.21 billion in revenue from the electric vehicle segment alone in Q2. In particular, sales surged in the Chinese market, which had once struggled due to boycott campaigns amid worsening public opinion, driven by aggressive price cuts for the ‘Model Y,’ contributing to the strong performance.

Tesla produced 206,421 vehicles in Q2 and delivered 201,250 of them to customers. The number of deliveries more than doubled compared to 98,910 units in the same period last year, surpassing the record of 184,800 units set in Q1 this year.

Foreign media highlighted the significance of this record-breaking performance, noting that the proportion of pure electric vehicle sales revenue increased rather than revenue from regulatory credit sales or Bitcoin capital gains. Of Tesla’s Q2 electric vehicle segment revenue, sales from regulatory credits granted to zero-emission companies amounted to $354 million, significantly reducing their share of total revenue.

Regulatory credits are a type of point provided by the government to companies that contribute to reducing environmental pollution, which can be sold to generate revenue. CNN evaluated that, unlike other electric vehicle companies, Tesla’s reduction in the proportion of revenue from regulatory credit sales is meaningful.

However, Tesla recorded a $23 million loss due to the continued decline in Bitcoin prices after investing $1.5 billion earlier this year.

Tesla expects production disruptions caused by global supply chain issues to continue until next year. In a letter sent to investors on the same day, Tesla announced, "Due to limited availability of battery cells and global supply chain issues, the launch schedule of the electric truck ‘Tesla Semi’ is postponed to next year."

With Tesla’s better-than-expected results, expectations for the upcoming earnings reports of big tech companies this week are also rising. Starting with Apple and Alphabet, Google’s parent company, on the 27th, followed by Facebook on the 28th and Amazon on the 29th, a series of Q2 earnings announcements from big tech companies are scheduled. The Wall Street Journal (WSJ) forecasted that the trend of ‘earnings surprises’ among US companies will continue with big tech firms.

The market estimates that Apple will see a 23% increase in revenue and a 55% increase in profit, driven by increased iPhone sales, following last quarter’s performance. Amazon, which has continued its record-breaking earnings streak benefiting from the COVID-19 remote work boom, projected Q2 revenue guidance of $110 billion to $116 billion, signaling it will surpass $100 billion in revenue for three consecutive quarters following Q4 last year.