Tesla targets production growth despite supply chain woes
By Neil Dennis
06:40, 27 April 2021
Tesla reported strong growth in first-quarter revenues as production increases in China offset “insane difficulties” in the company’s parts supply chain.
Total revenues at the electric car manufacturer rose to $10.39bn, up 74% on the same period a year ago. Profits were also up, with total gross earnings up 79% to $2.22bn.
The company reported adjusted earnings a share of $0.93 up massively from $0.23 a share a year ago – easily beating Wall Street estimates of $0.75-$0.80 a share.
Shares drop
The share price dropped in after-hours trading, however, with investors likely looking at the slim growth in margin, given the flattering effects of higher volume unit sales, cost reductions and the sale of $100m worth of bitcoins.
Meanwhile, unit prices for its vehicles dropped by 13% year on year, as the company transitioned to more affordable new models.
Shares in Tesla were down 2.5% at $738.20 in after-hours trade on the New York Stock Exchange.
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Ramping production
The company, headed by Elon Musk, reported earlier in April that it had produced 180,338 vehicles in the first quarter and had delivered 184,800. It added it was in the early stages of ramping up production, with new manufacturing sites in Berlin and Texas.
Tesla, however, is striving to increase production to meet growing demand at a time when the parts supply chain for all carmakers is facing huge bottlenecks – particularly in the procurement of microchips.
Musk said in an investor call that while demand had been the best the company had seen, it faced “insane difficulties” in deliveries of a wide range of parts.
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