It seems 2020 is turning out to be a great year for Tesla and its eccentric CEO. The company released its Q3 2020 earnings this week, and despite investors and analysts anticipating a solid quarter, the actual results were even better.
For starters, Tesla reports delivering 139,300 vehicles during the quarter, a new record for the company. New records were reached in terms of profitability and free cash flow as well, the report noted.
As for automotive revenues, it recorded $7.61 billion, a whopping 47% increase Q-o-Q and 42% Y-o-Y, while total revenue increased 45% Q-o-Q and 39% Y-o-Y to $8.7 billion.
In its continued streak of profitability, Tesla recorded 2.063 billion, a 63% increase Q-o-Q and 73% Y-o-Y.
Here is how Tesla performed versus analyst expectations, as per CNBC:
- Earnings per share (adjusted): 76 cents vs 57 cents, per Refinitiv
- Revenue: $8.77 billion vs $8.36 billion, per Refinitiv
- Net income (GAAP): $331 million vs $394 million, per Refinitiv
“The third quarter of 2020 was a record quarter on many levels,” the report summary reads. “We are increasingly focused on our next phase of growth. We continue to see growing interest in our cars, storage and solar products and remain focused on cost-efficiency while growing capacity as quickly as possible.”
The report also mentions the buildout of the company’s three factories proceeding well. Tesla has one in the US, one in Shanghai, and one in Germany that will be ready for production in 2021.
“We are increasing production to meet demand, reducing costs, including localization, driving higher efficiency across the business and tightening our cash conversion cycle,” Zachary Kirkhorn, Chief Financial Officer at Tesla, said during the call. “We’ve made tremendous progress on this front over the last 1.5 years. We’re also aiming to achieve our original 2020 guidance of 500,000 deliveries despite the operational interruptions earlier in the year.”
As for the highly-anticipated Cybertruck, CEO Elon Musk said that Tesla might be able to make some deliveries next year “if all goes well.”
All in all, the electric vehicle sector continues to show strength after strength. No longer just an afterthought or something automotive vehicles brag about for a few minutes at conventions, EVs are becoming an entire market in their own right. Tesla, for one, continues to lead the US market, while globally EV sales continue to grow as more and more manufacturers invest in the technology.
Deloitte estimates that “the market will reach a tipping point in 2022 – when the cost of ownership of a [Battery Electric Vehicle] is on par with its internal combustion engine counterparts.”