If not surprisingly, Tesla is likely to make a full year profit in 2020. Teslas electric vehicle manufacturing and sales logic will be more feasible to other investors.
For a long time, although Tesla has set off an unprecedented heat in the automobile industry in recent decades, it has not been widely recognized. One of the key reasons is that the cost of electric vehicles has not fundamentally broken through, and the scale has not been released. Generally speaking, Tesla is still a money losing business - even Tesla, the industry leader, has not achieved annual profits. This has become the Curse of the electric vehicle industry.
Tesla is expected to break this curse this year. After the release of the financial report, as of publication, Teslas share price rose 3.23% after hours, about $436.3 per share. As of the end of the day, Teslas share price was $422.64, with a total market value of $393.82 billion.
Revenue and net profit increased significantly year-on-year and month on month, and Tesla ushered in the best quarter in history. Elon Musk, Teslas CEO, couldnt hide his excitement in a conference call after the results were released.
In terms of revenue, the main reason for the continued growth in the third quarter is the further improvement of vehicle delivery. After all, auto sales are still Teslas largest revenue business, accounting for 90% of total revenue.
Data show that Teslas automobile related revenue in the third quarter was $7.6 billion, up 42% year-on-year and 47% month on month. In terms of specific delivery data, 139593 vehicles were delivered in the quarter, up 44% year-on-year and 54% month on month. Among them, 124318 vehicles were delivered by Model3 / y, with a year-on-year growth of 56% and a month on month growth of 55%.
The continuous high volume of Model3 / y has brought Tesla steady increase in revenue and profit. Although the price of Model3 / y is more user-friendly than that of models / x, Teslas gross profit margin has increased rather than decreased under the condition of large-scale production and delivery. In the third quarter, the gross profit margin of Tesla automobile business reached 27.7%, and the overall gross profit margin reached 23.5%, both reaching a new high.
It is worth mentioning that the increase in Teslas gross margin is largely related to Chinese factories. Under the policy support of improving the level of opening up and cultivating the new energy automobile industry chain, Teslas Shanghai Port factory has obtained many preferential policies (such as obtaining loans at low interest rates). Meanwhile, with the formation of the local supply chain, the overall efficiency has been further improved.
Expected to achieve the first full year profit
Tesla CFO Zachary kirkhorn said in a conference call that Teslas manufacturing and operating costs continued to decline and the companys strong performance momentum would continue.
Sales are still a key factor. According to the previous target put forward by Teslas management, the company will deliver 500000 vehicles throughout the year, which remains unchanged in the three quarterly reports released this time.
Even for Tesla, sustained high growth is challenging. However, Tesla said the capacity and output of the Shanghai plant were still gradually increasing, and there were further improvements in logistics and delivery efficiency. Teslas Shanghai plants model 3 capacity is said to have grown to 250000 vehicles a year. In addition, the model Y model produced by the Fremont factory in the United States is expected to reach the production capacity soon.
Finally, the promotion of sales volume is inseparable from the support of the market. Tesla has a large number of fans in China and even in the world. However, with the increase of the number of cars, the problems of the vehicle itself and enterprise management have been magnified, which has more or less hidden dangers for the sales prospects of Tesla.
Recently, Tesla once again caused controversy between many car owners and consumers because of the sudden price reduction. Although price reduction is a conventional way to attract customers, Teslas no warning behavior will inevitably dissatisfy car owners who pick up the car at the original price. In addition, Tesla also cancelled the 7-day no reason refund policy, which has broken the road for car owners to repent.
In addition, Teslas own products also exposed many problems. In addition to the frequent reports of battery fire, vehicle out of control and so on, there are even low-level errors like bumper design defects. In addition to these product defects, Teslas handling of these problems has become a controversial point of much criticism.