Tesla doubles quarterly profit from 2021, despite struggles

The manufacturer has increased its prices to overcome production problems in China in particular.

Tesla is no longer making a record but is pulling out of a bad patch. Net profit for Elon Musk’s company, otherwise mired in a legal battle over the takeover of Twitter, was $2.3 billion in the period, almost twice as much as in the second quarter of last year. For the first time since the start of 2021, its profits did not rise to a new record, however. And its turnover, at 16.9 billion dollars, was also a little disappointing.

But Tesla had already indicated that its deliveries had fallen by 18% compared to the previous quarter due in particular to the closure of its Shanghai factory for several weeks, because of the Covid.

The manufacturer must also juggle the shortage of semiconductors, which has affected the entire automotive sector since the beginning of 2021, with rising raw material prices and the lack of personnel.

To deal with this small air pocket, Elon Musk announced in June the elimination of around 3 to 3.5% of the workforce, without touching the workers. “We didn’t know when the confinements in China were going to ease”, justified the boss during a conference call.

The group has also increased the price of its vehicles, its cheapest model currently being sold in the United States at 48,840 dollars.

“They are frankly at unfortunate levels,” said Elon Musk. But this is to reflect “the shocks in the supply chain and on production” as well as “crazy inflation”, he added, saying he hoped to eventually be able to “reduce them a little”.

This did not prevent the gross margin of its automotive activity, a particularly observed indicator, from falling slightly.

Production up

Despite these challenges, Tesla has maintained its long-term goal of growing deliveries by an average of 50% per year, which would amount to around 1.4 million vehicles in 2022. The group is aiming for an annual production rate of 2 million vehicles at the end of the calendar year.

Already in June, production at its plants in Fremont, California, and Shanghai had returned to a record high. And the group is counting on accelerating the pace in its new factories in Berlin and Austin (Texas).

Tesla also continues to profit from the sale to other companies of the carbon credits granted to it because its cars do not emit pollutants, earning $344 million in the process.

The stock rose 0.8% in Wednesday’s electronic trading following the close on Wall Street. It is down around 30% since the start of the year, affected by the general downturn in the markets.

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