Tesla Beats Profit Target Despite Chip Woes

Tesla posted a bigger second-quarter profit than expected on Tuesday thanks to higher sales of its less-expensive electric vehicles, as it raised vehicle prices and cut costs.

Tesla CEO Elon Musk, however, said a global chip shortage that led to temporary factory shutdowns for the carmaker, remains serious, and offered no details on the timing of its Cybertruck and next-generation batteries.

For the first time since late 2019, Tesla profits did not rely on sales of environmental credits to other carmakers, a sign of increasing financial health for the manufacturing operation.

Shares of the world's most valuable automaker rose nearly 1 percent in extended trade.

In a call with investors and analysts, Tesla executives said that volume production growth for this year will depend on parts availability, as it aims to grow deliveries by more than 50 percent.

Musk said Tesla has "many calls at midnight, 1am, just with suppliers about resolving a lot of the shortages."

While some people had suggested Tesla build its own chip fab, he pointed to the long lead time. "That would take us, even moving like lightning, 12 to 18 months," he said.

Still, Musk said Tesla expects to start limited production this year of the Model Y SUV at factories under construction in Texas and Germany.

The carmaker, led by the billionaire entrepreneur, said revenue jumped to US$11.96 billion from US$6.04 billion a year earlier, when its California factory was shut down for more than six weeks due to local lockdown orders to fight the pandemic.

Analysts had expected revenue of about US$11.3 billion, according to IBES data from Refinitiv.

Excluding items, Tesla posted a profit of US$1.45 per share, easily topping analyst expectations for a profit of 98 cents per share.

"Tesla impressed with its numbers, as most of its revenue came from vehicle sales," Jesse Cohen, senior analyst at Investing.com, said. (Reuters)