Elon Musk at party for Tesla’s new Giga Berline factory in Grünheide, east of Berlin
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Tesla’s robust deliveries of electric Model Ys and 3s helped the Elon Musk-led carmaker post record net income of $1.6 billion in the third quarter, despite component sourcing headaches that have slowed the entire global auto industry, as it prepares to open massive new plants in Germany and Texas.
The company said earnings per share for the three months that ended on Sept. 30 rose more than fourfold from a year ago to $1.44 on a GAAP basis or to $2.09 excluding certain items. Consensus analyst expectations were for $1.67. Quarterly revenue was $13.8 billion, up 57% from a year ago and in line with analysts’ expectations of as much as $13.9 billion. Sales egulatory credits to other automakers, a long-time source of free money, dropped 30% to $279 million.
During the quarter “we saw a continuation of global supply chain, transportation and other manufacturing challenges,” Tesla said in a results release. “We continue to run our production lines as close to full capacity as conditions allow. While sequential growth remains our goal, the magnitude of growth will be determined largely by outside factors.”
The company is in a transition phase this year as it prepares to dramatically boost global production. Tesla is awaiting approval in Germany to begin building vehicles at its new Giga Berlin factory and also will soon begin production at its Gigafactory Texas near Austin. The addition of both facilities should boost its global production footprint by more than 50% in 2022.
“We believe the current supply chain issues have taken roughly 40,000 cars off the annual numbers for Tesla,” Dan Ives, an equity analyst with Wedbush Securities, said in a research note. “Despite this dynamic Musk & Co. should near the 900,000 mark for 2021 with a 1.3 million-1.4 million unit bogey for 2022.”
Tesla previously reported delivering 241,300 vehicles worldwide in the quarter, the most ever, and built 237,823 cars at its plants in California and China. So far this year the company, which is shifting its headquarters to Austin, Texas, has delivered 627,427 vehicles to global customers.
The company’s Fremont, California, plant, which built more than 430,000 EVs in the last four quarters, currently can produce as many as 600,000 units. Meanwhile, its new Shanghai, China, plant, a major source of vehicle exports, accounted for much of the volume growth during the quarter. Tesla estimates it can produce more than 450,000 vehicles annually.
“China is the star of the show after headwinds earlier this year,” said Ives, who has an Outperform rating and $1,000 target price on Tesla shares.
The stock was little changed in Nasdaq trading on Wednesday, rising 0.2% to close at $865.80.
