Tesla cars: Company net income exceeds $1b
Aftab Ahmed
Islamabad: Tesla cars are affordable? This is what people are talking about.
No matter, you can afford these cars or not, it has beaten the expectation of experts in its recent financial results.
The share price of tesla went down more than 1 percent on stock trading soon after its results. However, earnings stood at $0.07 per share that was higher than expectations of the financial results.
Tesla, Inc. (TSLA) announced financial results for the first quarter of the financial year 2020-21.
The company had reported earlier the delivery of its cars stood at 184,800 which was more than estimates. Tesla’s shares, the total return was, 361.9%, exceeding the S&P 500’s total return of 45.5%.
The core business of Tesla has been producing electric vehicle cars. The company has been making efforts to expand the business to make more cars.
In this regard, it has acquired several companies in recent years which included Germany-based Grohmann Engineering GmbH and Perbix Machine Co. Inc. The bid aims at boosting its manufacturing efficiency and capacity.
Tesla cars are more comfortable and have attracted a lot of attraction of the customers. Even, people in Pakistan are discussing the prices of these cars and their affordability. They want to know whether they are cheap or expensive.
Three Japan-based car assemblers-Suzuki, Toyota, and Honda had a monopoly. However, the prices of these cars were higher and new entrants like Kia motor was also manufacturing cars to beat the Japanese assemblers. Kia had introduced a famous brand of Sportage in Pakistan.
Tesla has informed it is currently working on building capacity for its Model Y at a Gigafactory in Berlin and one in Texas. It hopes that it would start the delivery of Tesla cars from both locations in 2021.
The company says that increasing productive efficiency and capacity matters to it justify Tesla’s high valuation. However, it has rivals like Volkswagen AG and Ford Motor Company in the market that are causing tough competition.
Though the company faced challenges of seasonability and instability in the supply chain, it made it possible to achieve the highest delivery of cars in Q1.
Tesla has also resolved the issue of the chip shortage through new microcontrollers. It also simultaneously developed firmware for new chips new suppliers had made.
Tesla further claimed its car Model 3 had been the best-selling premium sedan in the world. Tesla outsold even its gas-powered counterparts. The company has attributed its vehicle deliveries as the main driver to boost revenue growth.
It is also hoping to grow car deliveries at an annual pace of 50% in FY 2021.
TSLA Profitability
Tesla’s non-GAAP net income had exceeded $1 billion for the first time, primarily due to a boost in volume growth. The other contributors were regulatory credit, sale of bitcoin, and reduction in cost.
