Tesla shares fell 2.5% after the world’s most valuable auto company released its quarterly results. Despite Tesla’s record profit growth, skeptics saw many risks for the company in 2021.
Tesla (TSLA) shares reacted with a decline in non-trading time on the first quarter 2021 financial report released by the company on Monday after the close of trading.
The global leader in electric vehicle manufacturing exceeded analyst average expectations for quarterly revenues and earnings, but did not provide financial forecasts for the second quarter and the current year.
Tesla Key Figures
Earnings per share in the first quarter rose to $ 0.93, a sharp increase from last year’s $ 0.25 and $ 0.14 better than the analyst average of $ 0.79.
Tesla’s total profits hit a record $ 1.052 billion, but analysts indicate that it was achieved through the sale of regulatory loans to other automakers and through the sale of bitcoins during the quarter for $ 101 million.
This raises concerns that Tesla risks falling profit margins as more carmakers move to EV production.
Tesla announced in February that it acquired $ 1.5 billion worth of bitcoin and could potentially invest in other cryptocurrencies in the future. In the first quarter, management allowed the company’s customers to buy Tesla cars with Bitcoin.
“We intend to hold onto what we have for the long term and continue to accumulate bitcoins from our customers’ transactions when they buy cars,” Chief Financial Officer Zachary Kirkhorn told investors.
Tesla’s belief in cryptocurrencies is troubling for many, as bitcoins and other cryptocurrencies are highly volatile and are viewed as high-risk assets.
Tesla’s first-quarter revenues were $ 10.39 billion, up 129% from last year, but 17% lower than the fourth quarter, while above the $ 10.29 billion analyst estimate. Tesla’s quarterly and earnings statistics for recent 2 years available here.
Tesla executives noted that the Model 3 became the best-selling premium sedan in the world and reiterated its forecast for electric vehicle shipments to grow by at least 50% this year, i.e. minimum 750,000 units.
Tesla’s manufacturing problems
On the one hand, Tesla in early April announced a new record for the supply of electric vehicles: 184,800 units in the first quarter of 2021. This is 23% higher than the previous fourth quarter and 109% higher than the first quarter of 2020.
Against the backdrop of this success, analysts expected a good financial report. However, this year Tesla has a lot of production challenges and challenges that the company has to tackle.
Tesla said that in the first quarter, the company was able to address the chip shortage plaguing the entire automotive industry, in part by “extremely rapid transition to new microcontrollers and the simultaneous development of firmware for new chips created by new suppliers.”
Tesla did not disclose the names of its new suppliers.
At the same time, Musk said: “Tesla had one of the toughest supply chain challenges we have ever faced in the first quarter. This is a huge problem. “
Tesla CFO Zachary Kirkhorn confirmed that supply chain problems are likely to remain a concern for the company this year.
Tesla’s production at its Shanghai plant is nearing maximum capacity, with the company planning to launch production at its first European plant in Berlin by the end of 2021. To ramp up production and fulfill its promise to increase shipments by 50% this year, Tesla needs to address the supply of chips and other components.
Tesla’s Model S and Model X electric cars were not produced in the first quarter, the company was selling leftovers as it prepares to release updated versions.
Due to “more problems than expected,” Tesla executives said the first new Model S Plaid sedans were not delivered to customers in February as the company had originally promised. New delivery dates for the Model S Plaid are starting in May 2021, with shipments of the updated Model X starting in the third quarter of this year.
Tesla has confirmed it plans to release the first Semi trucks this year, but said nothing about the Cybertruck pickups, which customers began pre-ordering two years ago.
Tesla has launched a pilot production of its own batteries at the Fremont plant and Gen. director Elon Musk expects to achieve their mass production in 12-18 months. These batteries are critical to Tesla’s production plans for the Cybertruck and Semi. Musk also expects “limited” battery production at factories in Berlin and Austin this year.