Tesla posts a wildly profitable Q3 despite difficult car market
More than 90 percent of its quarterly deliveries are attributed to the Model Y and Model 3.
Despite a global pandemic and ongoing chip shortage, Tesla continues to make money hand over fist. The company reported on Wednesday that it had a net income of $1.62 billion — five times more than it did this time last year. What's more, Tesla's operating income grew some 54 percent over the past quarter to $2 billion.
Company executives pointed to record-setting sales of both the Model 3 and Model Y — a combined 232,102 units delivered during Q3 2021 — for the explosive earnings growth, though only 9,289 Models X and S were shipped during the same period, a nearly 40 percent drop from Q2 2021 rates. Overall, deliveries increased in Q3 by 20 percent compared to the previous quarter and increased by roughly 70 percent over Q3 2020. Tesla executives credit increased production of the Model Y at the Shanghai Gigafactory for the boost in deliveries.
On the technology front, Tesla continues its FSD City Streets beta rollout and plans to "continue to monitor fleet data closely to help facilitate a smooth rollout," per its quarterly update.
The company also released a more streamlined iteration of its car companion app that "enables phone key for multiple vehicles simultaneously, allows commands to be sent to the vehicle immediately upon opening the app and integrates the purchase of upgrades, subscriptions and accessories." New features include Disney+ streaming, a scrolling arcade shooter dubbed Sky Force Reloaded, a "car wash mode," and various tweaks to improve the vehicle's cold weather performance.
Looking ahead, the company expects to achieve a 50 percent average annual growth in vehicle deliveries "over a multi-year horizon" and eventually reach "industry-leading" operating margins. In the short term, however, "Q4 production will depend heavily on availability of parts, but we are driving for continued growth," Tesla CFO Zachary Kirkhorn said during the call.
"Tesla continues to break molds in these [existing] vehicle segments and we hope to do so with each new product," Martin Viega, Tesla's Senior Director of Investor Relations, noted. "As we've said publicly, we'll eventually expand the vehicle lineup to get to larger volumes. We believe that we will need to be in all major segments across small and mid-size sedans, SUVs and trucks to do so along with, of course, the massive space of Robo taxi."
