San Francisco It was the first time in the ten-year history of Tesla that Elon Musk – head and founder of the Californian electric car manufacturer – did not attend the presentation of the quarterly figures in person. Instead, Chief Financial Officer Zachary Kirkhorn led through the business figures. The 37-year-old had to announce new records to the investors and analysts present early on Wednesday evening (local time) in a conference call.
“Our company made important progress in meeting all relevant financial metrics in the third quarter,” said Kirkhorn. “We delivered more than 240,000 vehicles in total, 20 percent more than in the previous quarter and more than 70 percent more than in the same quarter of the previous year.” Not only did sales and production figures increase significantly despite the pandemic, but also profitability.
With a profit growth of almost 390 percent to 1.6 billion US dollars, the group closed the months between July and September with the best result in the company’s history. Sales grew by as much as 57 percent to $ 13.8 billion. The group has exceeded the expectations of many analysts – although the share initially reacted cautiously after the Tesla price had already risen significantly in the past few days.
Tesla is highly profitable
The message that Kirkhorn wants to send with the numbers is clear: The Californian carmaker has developed from a once capital-intensive start-up into a profitable global corporation – and in doing so largely defied the global chip crisis, which at times even led to production stops at competitors such as VW led. At Tesla, on the other hand, its own capacities cause problems: The group cannot build as many cars in its plants as the customers would like.
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In addition to several plants in the USA and China, the group is currently building a new gigafactory in Grünheide, Brandenburg. Work is going according to plan here. According to the quarterly report, the group expects to receive the final approvals before the end of the year. Originally, Tesla had already wanted to start operating the plant in July, but was initially prevented from doing so because of open questions relating to licensing law.
“We are trying everything we can to increase our capacities and thus meet the demand that is reaching us,” said Kirkhorn. Currently, depending on the region, it could take a few months for a Tesla vehicle to be delivered to a customer after it has been ordered. It is to be expected that the period will rather increase. “The bottom line is that we won’t be able to expand our production capacities quickly enough,” said the manager.
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In view of the simultaneous increase in the price of many important base materials, customers have to be prepared for longer waiting times as well as higher prices. For example, nickel has increased in price by 40 percent in the past twelve months and aluminum by almost 70 percent. Both materials play an important role in the battery cell on the one hand, and in the body on the other hand – and thus also have an effect on the price of the vehicle as a whole.
Kirkhorn emphasized that pricing had recently been a major challenge for Tesla. “We are currently seeing increasing macroeconomic influences on our cost structure.” Because of the long delivery times, it is difficult to predict whether a price agreed upon purchase would reflect the actual costs during production. “That is why our prices will keep rising and falling – and sometimes our price decisions will also seem nonsensical to the customer,” said the CFO. But behind this is a strategy that takes several factors into account.
Tesla is also trying to reduce its customers’ running costs at the same time. The automaker has been testing its own insurance tariff since last week after customers complained that many insurers were allegedly charging too high premiums for the Tesla models. “Running costs are critical to many car buyers,” said Kirkhorn. That is why the group has developed a tariff that should significantly undercut the price of traditional insurers.
The key here is the evaluation of the vehicle data, which Tesla uses to calculate the individual accident risk and then adjust the costs of the contract. Currently, the offer is only aimed at customers in Texas, as many US states regulate their insurance industry independently. In the long term, however, Tesla wants to offer the insurance in all major markets in which the group is active, said Kirkhorn.
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