Tesla submitted "the best quarterly report in history", and its net profit in the third quarter surged 131% year-on-year
"The third quarter is the best quarter in Tesla's history." Tesla CEO Elon Musk said on the earnings call.
After the market opened on October 21, local time in the United States, Tesla released its third quarter fiscal 2020 financial report. The report shows that Tesla Motors’ total revenue in the third quarter was US$8.771 billion, a year-on-year increase of 39% and a quarter-on-quarter increase of 45%; the net profit attributable to common shareholders was US$331 million, a year-on-year increase of 131% and a quarter-on-quarter increase of 218%. . Among them, Tesla's automotive business revenue was US$7.6 billion, accounting for approximately 91% of its total revenue in the third quarter.
Tesla CFO Zachary Kirkhorn admitted in the conference call that Tesla’s good performance in the third quarter was attributable to better-than-expected regulatory credit revenue : “Regulatory credit revenue is stronger than we expected. We expect regulatory credit this year Revenue will more than double that of last year." He said that Tesla's strong performance momentum will continue because manufacturing and operating costs continue to fall.
While announcing its third-quarter profit, Tesla again confirmed that its annual sales target of 500,000 has not changed. In the third quarter of this year, Tesla delivered 139,300 vehicles, and the first three quarters delivered 318,000 vehicles. To complete the delivery of 500,000 vehicles within the year, Tesla needs to increase the number of deliveries to 181,500 vehicles in the fourth quarter of this year, which is equivalent to an increase of about 40,000 vehicles on the basis of the delivery volume in the third quarter.
Although it is difficult to achieve the goal, Tesla said that the Shanghai Gigafactory's Model Y production and Shanghai Gigafactory's production capacity have gradually increased, as well as further improvements in logistics and delivery efficiency. At present, the production capacity of Tesla's Shanghai Super Factory Model 3 has increased to 250,000 vehicles per year. At the same time, the Model Y model of the Fremont Super Factory in the United States is expected to reach production capacity soon.
In the past 12 months, Tesla has achieved an operating profit margin of 6.3%. Tesla expects that over time, the company's operating profit margin will continue to grow, and with the implementation of capacity expansion and localization plans will eventually reach industry-leading levels.
At present, Tesla is building Model Y production capacity in Shanghai, Berlin and Texas "super factories", and will continue to deliver from all three factories as planned in 2021. In addition, the delivery of Tesla Semi models will also begin in 2021.
On the day before the earnings report was released, Musk said on Twitter that Tesla would push the full autonomous driving capability (FSD) test version on Tuesday night, US time, and said that this push would be extremely slow and cautious. In the earnings conference call, Musk once again made it clear that FSD will be launched to more car owners before this weekend and will be widely released by the end of this year. Musk also said that the deferred revenue from fully autonomous driving capabilities in the third quarter was approximately $10 million.
Regarding the Tesla Battery Day held in September, Musk said in the conference call that the results of the Battery Day are the culmination of Tesla's years of hard work. He said that in the next few years, Tesla's battery production costs will be reduced to only half of what it is now, and capital expenditures will be reduced by one third.
The third-quarter results higher than market expectations have also become a positive catalyst for its stock price rise.
On the day of the earnings report, Tesla Motors' stock price rose by $0.70 in Nasdaq's regular trading to close at $422.64, an increase of 0.17%. In the subsequent after-hours trading at 4:26 pm Eastern Time on Wednesday, Tesla Motors shares rose to $436.31, an increase of 3.23%.
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