Tiger Securities: the three main contributors behind Teslas five consecutive quarterly profits

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 Tiger Securities: the three main contributors behind Teslas five consecutive quarterly profits


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Revenue in the third quarter reached 8.771 billion US dollars, up 45% month on month and 39% year on year, higher than the market expected of 8.36 billion US dollars.

In fact, it is a big probability that Teslas financial report exceeds the expectation. After all, Teslas auto sales account for 86.77% of the total revenue, and the auto sales revenue is determined by the vehicle delivery volume and ASP (unit vehicle price). Combined with the record Q3 delivery data published before, it is not surprising that the revenue exceeded the expectation.

The only surprise was the rise in ASP. The average selling price of Tesla in the last quarter was 52271, while that in this quarter was close to 55000, which was mainly due to the introduction of modely earlier this year. As the price of modely is higher than that of Model3, that is, the more money modely sells, the greater its contribution to ASP, and the better Teslas revenue performance will be.

This quarters revenue growth is not only due to the increase in car sales, but also due to the large increase in carbon credits. Tesla CFO Zachary kirkhorn said Teslas third quarter results benefited from better than expected carbon credits. The carbon credits business is stronger than we expected, and this year our credit business has more than doubled from last year, he said.

Carbon credits, as the name suggests, sell carbon credits to rival car companies, and Tesla earns revenue by selling zero emission vehicle (ZEV) credits and greenhouse gas emission (GHG) credits to other manufacturers. Instead of building their own electrified or energy-efficient vehicles, these manufacturers use the credits they buy to meet market regulations. In the first quarter, Tesla realized three consecutive GAAP quarterly profits based on this project, reversing the loss situation a year ago. This quarters revenue amounted to 397 million, more than tripled from 134 million in the same period last year.

Five consecutive quarters of profits

In fact, it is no surprise that the net profit exceeded the expectation. After the record delivery data, the net profit exceeding the expectation is also a probability event. It is worth mentioning that the operating expenses increased by 33% compared with the last quarter to reach 1.25 billion US dollars. The surge in costs was mainly due to Teslas efforts to build new plants in Austin, Texas and Brandenburg.

Modely and Chinese power bring hope to Tesla Q4

In addition to the strong financial report, Tesla is also optimistic about the future. Tesla reiterated its goal of delivering 500000 vehicles in the whole year, which means that 181000 vehicles will be delivered in the fourth quarter, which will mainly rely on modely and China sales. As Tesla started to deliver modely at the end of the first quarter of this year, the delivery time of this electric vehicle is not long, and only more than six months will be delivered this year By the end of August, only more than five months have been delivered. With the extension of delivery time, the delivery volume will be higher. In a conference call, Tesla reiterated that model y will begin delivery from factories in Shanghai, Texas and Berlin next year. With the increase of delivery, Teslas revenue will be further improved.

From the demand side, with the weak recovery of the United States and the struggle of Europe in the second round of the epidemic, the Chinese market is given high expectations. Tesla did not release regional sales, but data from the China Passenger Car Association (CPCA), the China Automotive Industry Association, showed that sales of Tesla Model 3 cars were basically flat in the third quarter of this year. Overall, Tesla sold about 34100 Shanghai made model 3 models in the third quarter. In conclusion, Tesla benefited from the sales increase of modely. After Q2 financial report, Tesla once again achieved better than expected financial report, and has been profitable for five consecutive quarters. However, the uncertainty of Teslas future is also increasing. Of course, if Tesla can perform better in Shanghai factory or model y, the market will continue to cheer for Tesla. This document does not constitute and shall not be deemed to constitute any agreement, offer, invitation to offer, opinion or proposal to purchase securities or other financial products. Nothing in this article constitutes an investment, legal, accounting or tax opinion of tiger securities, a statement of whether an investment or strategy is appropriate for your personal situation, or any other recommendation for you. Source: editor in charge of mass news: Chen Tiqiang_ NB6485

From the demand side, with the weak recovery of the United States and the struggle of Europe in the second round of the epidemic, the Chinese market is given high expectations. Tesla did not release regional sales, but data from the China Passenger Car Association (CPCA), the China Automotive Industry Association, showed that sales of Tesla Model 3 cars were basically flat in the third quarter of this year. Overall, Tesla sold about 34100 Shanghai made model 3 models in the third quarter.

Summary,

This document does not constitute and shall not be deemed to constitute any agreement, offer, invitation to offer, opinion or proposal to purchase securities or other financial products. Nothing in this article constitutes an investment, legal, accounting or tax opinion of tiger securities, a statement of whether an investment or strategy is appropriate for your personal situation, or any other recommendation for you.