Tesla surpasses $1B profit for first time

Tesla has blown past Wall Street expectations with its second-quarter earnings results, making history with a net profit exceeding $1 billion for the first time. During the quarter, the company produced and delivered over 200,000 electric vehicles and achieved an 11% operating margin. 

"Public sentiment towards EVs is at an inflection point and, at this point, I think almost everyone agrees that electric vehicles are the only way forward," Musk told analysts on the company's earnings call Monday.

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Tesla's second quarter profit came in at $1.14 billion, or $1.02 per share, compared with $104 million or 10 cents a share, a year ago. Adjusted for one-time items, Tesla earned $1.45 a share, compared with 44 cents a share a year ago.

Total revenue came in at $11.9 billion, a 98% year-over-year increase, thanks to substantial growth in vehicle deliveries and other parts of the company's business. Overall automotive revenues came in at $10.21 billion, of which only $354 million came from sales of regulatory credits. As for its energy and storage business, the company posted revenue of $801 million. In addition, Tesla reported a Bitcoin-related impairment of $23 million. 

Wedbush analyst Dan Ives called Monday's earnings results a "bullish print that should start to change sentiment on this core EV name to play the green tidal wave for the coming years," adding that the firm maintains an outperform rating and $1,000 price target on Tesla. Wedbush expects a total of 900,000 deliveries for Tesla's annual 2021 numbers.

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The better-than-expected earnings results come amid Tesla's increased scrutiny in China, the delayed rollout of its revamped Model S sedan and Model X SUV and the ongoing impact of a global semiconductor shortage and port congestion. 

Musk noted that the "big struggle" in the quarter was procuring modules that control the airbags and seat belts in Tesla's vehicles.

"Obviously you cannot ship a car without those and that limited our production severely worldwide in Shanghai and in Fremont," Musk said.

In order to weather the chip shortage, Tesla has rewrote its vehicle software to support alternative chips.

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Looking ahead, Tesla continues to expect 50% average annual growth in vehicle deliveries, but noted the rate of growth will depend on "equipment capacity, operational efficiency, and the capacity and stability of the supply chain." 

"For the rest of this year, our growth rate will be determined by the slowest part in our supply chain," Musk said. "Chip supply is fundamentally the governing factor on our output."

The company remains on track to build its first Model Y vehicles in Berlin and Austin in 2021. In order to focus its production in these factories, and due to limited availability of battery cells and its global supply chain challenges, Tesla has shifted the launch of its Semi truck to 2022. Meanwhile, Tesla's Cybertruck is slated for production in Austin, Texas following Model Y production. 

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Moving forward, Musk said he will no longer join Tesla earnings calls unless he has "something important to say." He will continue to participate in Tesla's annual shareholder meetings.  

Ticker	Security	Last	Change	Change %
TSLA	TESLA INC.	342.95	+0.92	+0.27%

Tesla shares rose more than 2% in after-hours trading Monday following the earnings announcement.