On July 28th, Tesla is rapidly transforming from a rising star in the automotive industry to a mature market leader, and its performance data can provide proof.The electric car manufacturer achieved a record profit of $1.1 billion in the second quarter, more than twice the net profit ($438 million) in the first quarter and more than 10 times the same period last year. So how did Tesla do it?
This is mainly due to two aspects: First, in terms of car sales, Tesla produced and delivered more than 200,000 cars in the second quarter, a record high. The second is to reduce costs. The company has drastically cut plant costs and increased its operating profit margin to 11%, which is on par with competitors such as General Motors.
In addition, Tesla has also brought in $354 million in revenue by selling carbon credits to other automakers. These automakers use carbon credits to meet environmental standards and avoid huge fines. But compared with the past, Tesla’s reliance on carbon credit income is much lower. This is a good sign, because other companies are starting to produce more of their own electric vehicles, reducing the need for carbon credits.
Nevertheless, Tesla’s stock price may still fluctuate wildly in the coming months, putting pressure on its market value of nearly $634 billion. JPMorgan Chase analyst Ryan Brinkman (Ryan Brinkman) said: “Tesla’s high valuation leaves little room for imperfect execution, and we do see signs of imperfect execution.”
Tesla CEO Elon Musk also warned that the shortage of computer chips that drags down the entire auto industry will continue to cause problems. He told investors: “Although we are producing cars at full speed, the global chip shortage is still quite serious. For the rest of this year, our growth rate will be determined by the slowest part of the supply chain.”
Tesla has postponed the production plan of the electric truck Semi to 2022, “because the battery supply is limited and the global supply chain is facing challenges.” The company also stated that it will postpone the debut of its electric pickup CyberTruck because the company is doing its best to bring new plants online in Austin, Texas, and Berlin, Germany. As competitors begin to produce more electric vehicles, it is important to expand production capacity, which may erode Tesla’s market share.
Bank of America analyst John Murphy said in a report to investors: “Although Tesla is clearly a pioneer in the electric vehicle market and has successfully differentiated itself, its operating environment is changing from a vacuum. It’s getting crowded day by day.” (Xiao Xiao)
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