Tesla (TSLA) Q3 2021 earnings results: EPS beat and monster automotive margins

Tesla Model Y body Texas

Tesla’s (NASDAQ:TSLA) third-quarter for 2021 saw the electric car maker post $13.757 billion in revenue. The results, which were discussed in the Q3 2021 Update Letter, were released after the closing bell on Wednesday, October 20.

Tesla was impressive in the third quarter, with the company producing a total of 237,823 vehicles. This was quite a feat considering the ongoing supply chain challenges that have so far adversely affected numerous carmakers today. The company also delivered a record 241,300 vehicles, comprised of 232,025 Model 3 and Model Y, as well as 9,275 Model S and Model X.

The company’s Q3 2021 results were bolstered in part by Tesla’s growing influence in China. Gigafactory Shanghai has so far become Tesla’s primary vehicle export hub, and it stayed true to this task by exporting both the Model 3 and the Model Y to foreign territories such as Europe and Asia. Deliveries of the high-margin Model S Plaid and Long Range also continued in the third quarter. 

The following are the key points in Tesla’s Q3 2021 Update Letter. In its letter, Tesla noted that Q3 2021 marked a time when the company achieved its best-ever net income, operating profit, and gross profit.

REVENUE

Tesla posted $13.757 billion in revenue for Q3 2021. In comparison, FactSet analyst consensus estimated that Tesla would be posting revenue of $13.7 billion for the third quarter. Estimize, on the other hand, forecasted $13.9 billion in revenue for the EV maker. 

EARNINGS

Tesla posted earnings per share (EPS) of $1.86 in the third quarter. In comparison, analysts polled by FactSet expected the company to report adjusted earnings of $1.58 per share. Estimize forecasted an EPS of $1.79 per share for Tesla in Q3 2021. 

CASH




Tesla’s operating cash flow less CAPEX stood at $1.3 billion in Q3 2021, while net debt and finance lease repayments reached $1.5 billion. Overall, Tesla saw a $164 million decrease in its cash and cash equivalents in the third quarter to $16.1 billion.

PROFITABILITY

Tesla posted $2 billion GAAP operating income and 14.6% operating margin in Q3 2021. The company also posted $1.6 billion of GAAP net income and $2.1 billion non-GAAP net income in the third quarter. Automotive gross margin stood at 30.5% GAAP (28.8% ex-credits) in Q3 2021.

NOTABLE UPDATES

  • Tesla’s Fremont factory has produced over 430,000 in the last four quarters, and there’s still room for improvement.
  • Giga Texas is moving as planned. First pre-production Model Y are now being built.
  • Giga Shanghai is settling in nicely on its role as Tesla’s primary vehicle export hub.
  • Giga Berlin is expected to receive its final permit by the end of the year. The facility is ready to start operations.
  • AI Day was an overwhelming success. Tesla received tons of employee applications for its AI team.
  • 4680 battery cell production continues to make progress

Tesla’s Q3 2021 Update Letter could be accessed below.

TSLA Q3 2021 Quarterly Update by Simon Alvarez on Scribd

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