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Tesla (TSLA) Reports Record Third-Quarter Profits, Beating Estimates; Supply Chain Issues Still Linger

Thursday, October 21, 2021 08:43 AM | Carl Pettit
Tesla (TSLA) Reports Record Third-Quarter Profits, Beating Estimates; Supply Chain Issues Still Linger

Tesla (TSLA) posted its third-quarter 2021 financial results on Oct. 20, marking a 145% earnings per share increase, beating market estimates. Pre-market today, TSLA stock dropped 1.61% in value.

Gross Margins Help Results

Tesla’s reported $1.62 billion in revenue for Q3 seemed to be given an assist by a 30.5% improvement to its automotive business gross margins, as well as improving margins overall of 26.6%, with both figures setting records for the company.

Chinese Sales

In China, Tesla’s Shanghai-based factory (the firm’s main export hub) surpassed the company’s factory in Fremont, California, in the number of cars produced. This high volume of production contributed to strong sales in China, which helped boost profits for the third quarter.

Supply Chain Issues

The company acknowledged that it faced “a variety of challenges, including semiconductor shortages, congestion at ports, and rolling blackouts,” which have affected Tesla’s ability to keep its factories “running at full speed.” According to estimates, these supply chain issues will take approximately 40,000 cars off Tesla’s annual numbers.

Outlook

The company said that its plans to grow its manufacturing capacity “as quickly as possible,” expecting to achieve “50% average annual growth in vehicle deliveries” over a multi-year period.

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