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Tesla earnings get off to a strong start due to surge in production

Tesla earnings get off to a strong start due to surge in production

The earnings of American electric vehicle and clean energy company, Tesla, reportedly got off to a strong start due to the successful escalation in production in the year 2021. As per figures disclosed following the closure of the market on Monday 26th April 2021, the strong demand for electric vehicles remained consistent in a more crowded market.

However, the attention of the Wall Street was focused on the profit margins of the company’s core automotive business. This was lower than anticipated as the model transition brought about a decrease in average selling prices and an increase in the costs of supply chain. Shares of Tesla fell over 2 per cent in aftermarket trading.

In early April 2021, Tesla’s robust demand for cars was confirmed when it recorded 184,000 vehicle deliveries during Q1. This is about 10 per cent better than anticipated. That was regardless of the drop in sales of older models X and S by over 80 per cent before the launch of the new version of the car.

As a result of strong deliveries, Tesla’s revenue escalated from just under $6 billion in the last year to a value of $10.39 billion.

On the basis of formal accounting principles, Tesla recorded a net profit of 39 cents per share or $438 million from a revenue of $16 million in the previous year. The figure was reached after a deduction of $299 million that was paid to Elon Musk, Tesla’s CEO, as part of the 2018 controversial stock-based compensation plan.

As per most analysts, Tesla was anticipated to report a gross margin from the automotive business for the first quarter, which roughly aligns with 24.1% in the Q4 of 2020. The margin was 22%, without considering the sale of regulated credits. Depreciation, interest, and pre-amortization adjusted earnings hit nearly $1.84 billion, which is double the level of the past year.

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Sunil Jha

Sunil Jha has been a part of the content industry for close to two years. Having previously worked as a voice over artist and sportswriter, he now focuses on writing articles for, across a slew of topics, ranging from technology to trade and finance. With a business-oriented educational background, Sunil brings forth the expertise of deep-dive research and a strategic approach in his write ups.