- In the third quarter, Tesla’s cash flow more than tripled to $1.4 billion, which brought the company’s total cash flow to $14.5 billion as of the end of the third quarter
- Tesla reiterated its goal of delivering 500,000 vehicles by the end of this year, which will require the company to substantially increase vehicle sales in the fourth quarter.
- Analysts believe that Tesla’s advantage may be reduced because more competitors join the clean energy vehicle market.
Tesla announced its fifth consecutive quarterly profit on Wednesday, with both revenue and profit hitting new highs. This is mainly due to the rapid increase in Model 3 and Model Y vehicle deliveries. The financial report shows that Tesla’s third-quarter revenue reached $8.8 billion, an increase of 39% this year.
Furthermore, its net profit reached $874 million, a substantial increase of 156% this year. After the financial report was announced, Tesla’s after-hours share price rose more than 3%.
In the third quarter, Tesla’s cash flow more than tripled to $1.4 billion, which brought the company’s total cash flow to $14.5 billion as of the end of the third quarter, an increase of 69% in three months.
Tesla reiterated its goal of delivering 500,000 vehicles by the end of this year, which will require the company to substantially increase vehicle sales in the fourth quarter. “Whether this goal can be achieved depends mainly on the growth of Model Y and Shanghai factory output,” Tesla said.
Tesla said on Wednesday that its Shanghai plant’s Model 3 production capacity has increased to 250,000 vehicles per year, which is its target output. This week, Tesla just announced that it will export China-made Model 3 electric vehicles to the European market. Tesla sold approximately 34,100 Model 3 electric vehicles manufactured by the Shanghai Super Factory in the third quarter.
Tesla also said that the annual production capacity of its Fremont, California plant has reached 590,000 vehicles, including a new SUV electric vehicle Model Y. The company said it will focus on improving manufacturing costs and efficiency, and increase production capacity as soon as possible.
To this end, Tesla is also building more car and battery plants in Berlin, Germany, and Austin, Texas, to increase existing production capacity and launch new models, including Cyber trucks and Semi self-driving trucks. The two new plants are expected to start production in 12 to 24 months.
Tesla said on “Battery Day,” held in September, that it will reduce battery production costs through self-produced batteries. However, Chief Executive Officer Elon Musk said in an investor meeting on Wednesday that the company will not rely on self-produced batteries before 2022, indicating that Tesla will continue to rely on its external battery suppliers, Panasonic, LG Chem, and CATL.
During the conference call, the analyst asked whether Tesla plans to deliver 840,000 to 1 million vehicles next year, based on the factory’s current maximum capacity. Another Tesla executive said that the company will provide next year’s delivery data guidance in the next quarter.
Tesla has overcome the downward trend of the entire automotive industry in 2020, and has resisted the new coronavirus pandemic and economic turmoil through stable sales and profits. Since the beginning of this year, Tesla’s stock price has risen by more than 400% and its market value is close to $400 billion.
Tesla’s outstanding performance in the capital market reflects investors’ confidence in the future of electric vehicles. But analysts believe that Tesla’s advantage may be reduced because more competitors join the clean energy vehicle market.
General Motors (GM) announced on Wednesday an electric version of the Hummer pickup truck, which will compete with Tesla’s future electric truck CyberTruck. Tesla said that CyberTruck will start production next year and deliver it as early as the end of 2021.
In the Chinese market, Tesla is also facing more and more squeezing of market share caused by new forces. Recently, Tesla successively lowered the prices of Model S and Model X.
Tesla’s entry into China has driven the development of the entire electric vehicle market and achieved the goal of “making the cake bigger,” allowing more consumers to start accepting electric vehicles, but the strength of local automakers that are catching up not to be underestimated.
Although Tesla has achieved mass production of electric vehicles, its next challenge will be the improvement of autonomous driving technology. At present, compared with the “fully automatic driverless” technology path of autopilot companies, such as Waymo, the “fully autonomous driving” claimed by Tesla is still “assisted driving” (Autopilot).
In recent years, Musk has been promising to achieve fully autonomous driving functions. Musk said in his latest tweet that Tesla will launch a new version of the so-called “Full Self-Driving” (FSD) more widely before the end of this year. At present, Tesla buyers can pay $8,000 to get an FSD upgrade.
However, safety organizations criticized Tesla’s term “fully autonomous driving” as “dangerously misleading,” because the system can only operate under limited-use conditions.