Tesla (NASDAQ: TSLA) has been doing extremely well over this past year, seemingly outperforming all other car companies out there on the market. While most automakers have reported struggling Q3 figures due to the pandemic, Tesla managed to not just do well for itself again but even beat out most people’s expectations for this quarter.
Tesla’s third-quarter results were strong overall. Its net profit for the quarter came in at $331 million, marking the fifth consecutive profit that the company has been profitable with Elon Musk even saying that this was the best quarter in the company’s history. Revenue came in at $8.8 billion, a 39% increase from the same time a year ago and well above the $8.3 billion most analysts were expecting from the carmaker.
Lower battery costs and a more efficient manufacturing process are helping widen Tesla’s margins and improve its profitability. Coupled with growing demand from China alongside new factories being opened up in the country, the Asian market looks especially promising for the carmaker.
Moving into 2021, Tesla expects a significant increase in production, alongside other projects such as the rollout of its electric semi truck. Tesla also confirmed that it is still on track to hit 500,000 vehicles produced by the end of the year, which was originally a pre-pandemic target that quickly got down after COVID-19 started spreading. Now, however, Tesla seems confident it can hit this original target after all. Musk even added that in 2021, Tesla could see car deliveries surge to almost one million.
“While achieving this goal has become more difficult, delivering half a million vehicles in 2020 remains our target. We expect our operating margin will continue to grow over time, ultimately reaching industry-leading levels,” said Tesla in a statement. Toni Sacconaghi, one Wall Street analyst covering Tesla, said in the Wall Street Journal that “The real story was the ability to drive better margins despite prices that are flat to down. They sound pretty pedal-to-the-metal in terms of growth.”
Tesla’s stock is up 3.5% so far in response to the news in after-hours trading on Wednesday. Already the largest carmaker in the world by market cap, 2020 has been an excellent year for what was once an embattled car manufacturer struggling to get by. Since the beginning of 2020, Tesla has seen its stock rise by more than 500%, making it one of the top-performing investments this year, seemingly despite the coronavirus’ mitigating effect on regular car demand. Most car companies have seen their sales fall by around 10% on average, with some seeing much larger declines in demand.
Tesla Company Profile
Founded in 2003 and based in Palo Alto, California, Tesla is a vertically integrated sustainable energy company that also aims to transition the world to electric mobility by making electric vehicles. It sells solar panels and solar roofs for energy generation plus batteries for stationary storage for residential and commercial properties including utilities. The Tesla Roadster debuted in 2008, Model S in 2012, Model X in 2015, Model 3 in 2017, and Model Y in 2020. Global deliveries in 2019 were 367,656 units. Tesla went public in 2010 and employs about 50,000 people. – Warrior Trading News