Key Takeaways

  • Vehicle deliveries, reported earlier this month, came in essentially in line with analyst estimates.
  • Higher vehicle deliveries indicate increasing demand for Tesla's main source of revenue as well as the company's ability to scale production.
  • Tesla expects to grow its vehicle deliveries by 50% over a multi-year horizon.
Tesla Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted EPS Beat $1.45 $0.99
Revenue Beat $12.0B $11.4B
Vehicle Deliveries Match 201.3K 201.3K

Source: Predictions based on analysts' consensus from Visible Alpha

Tesla (TSLA) Financial Results: Analysis

Tesla, Inc. (TSLA) reported Q2 FY 2021 earnings that surpassed analyst expectations. Adjusted earnings per share (EPS) exceeded expectations by 46%, rising 230% year over year (YOY). Quarterly net income surpassed $1 billion for the first time. Revenue also beat analyst forecasts, up 98% compared to the year-ago quarter. Tesla's vehicle deliveries for the quarter, which it reported earlier this month, came in at 201,250, essentially matching analysts' estimates. The company's shares were up more than 1% in after-hours trading. Over the past year, Tesla's shares have provided a total return of 113.6%, well above the S&P 500's total return of 36.5%.

TSLA Vehicle Deliveries

Tesla's vehicle deliveries rose 122.0% YOY, which was the primary driver of the company's revenue growth for the quarter. Tesla's primary business is making electric vehicles, and it needs to continue expanding production in order to grow revenue and profits. Tesla said that global demand for its vehicles continues to be robust and that it is producing at the limits of the available supply of parts. The company noted that, despite the ongoing global semiconductor shortage, it was able to continue expanding production.

The market for electric vehicles is also becoming increasingly competitive, with Volkswagen AG (VOW3) becoming the top-selling all-electric vehicle maker in Europe last year. As Tesla fights to remain a leader in the industry, it will have to be careful that it doesn't sacrifice quality as it ramps up production. Last month, Tesla began a recall of more than 285,000 vehicles in China due to problems with the vehicles' cruise-control system. Quality concerns such as these could hurt Tesla's reputation and dampen future demand for its vehicles.

Tesla said that it plans to expand its manufacturing capacity as fast as possible. It expects to achieve 50% average annual growth in vehicle deliveries over multiple years. However, the pace of growth will depend on equipment capacity and operational efficiency, as well as the capacity and stability of supply chains.

Tesla Earnings Call Recap 

On Monday's conference call, Tesla co-founder and Chief Executive Officer (CEO) Elon Musk surprised analysts by saying that he will no longer participate in all of Tesla's quarterly earnings calls. Musk was participating in the call from the site of Tesla’s new factory under construction in Austin, Texas. “Obviously, I’ll do the annual shareholder meeting but I think that going forward I will most likely not be on earnings calls unless there’s something really important that I need to say,” he said. Musk, who is the CEO of several other companies, has complained about his schedule.

Tesla's next earnings report (for Q3 FY 2021) is estimated to be released on Oct. 19, 2021.