Muskular

Tesla drops record profits thanks to big deliveries and supply-chain shortcuts

Friday, October 22, 2021 by Snacks
A Musk-ular quarter [skynesher/E+ via Getty Images]

A Musk-ular quarter [skynesher/E+ via Getty Images]

Elon(g) profit streak… nine quarters long, to be exact. Tesla notched another sales and delivery record last quarter. Despite supply-chain crunches and a global chip shortage, Tesla has been resilient compared to other carmakers, and still plans to boost deliveries by 50% each year.

  • 241K: The number of Teslas delivered last quarter. The lower-priced Model 3 and Model Ys made up a whopping 96% of the haul (sorry, S and X).
  • $1.6B: Tesla’s profit more than 4X’d from the same quarter last year, despite rising material and labor costs (#flation).

A Muskular effort... Tesla wasn’t immune to supply struggles: Its gig factories still aren’t operating at full capacity, which means longer delivery times and slower product rollouts (new Cybertruck ETA: 2023). Still, Tesla owns multiple stages of its own supply chain (it’s “vertically integrated”). Think: Tesla makes the machine that makes the Tesla. That's made it more resilient during the pandemic than many other carmakers.

  • GM’s US car deliveries dropped to 446K last quarter, down one-third from a year ago, because of supply disruptions.
  • Ford slashed production of its best-selling F-150 pickup truck and other profitable cars — again.
  • Chip shortages could cost automakers $210B this year. Tesla avoided some of the drama by manufacturing some of its own chips for its latest models.
THE TAKEAWAY

Sometimes fewer products can mean more profits… especially during a global supply shortage. Legacy car manufacturers like GM and Ford produce numerous models on a larger scale. Meanwhile, Tesla and Chinese EV rival Nio offer just a handful, relying on a leaner supply chain to meet demand. Like Tesla, Nio also posted record deliveries last quarter, partly thanks to China’s investment in domestic production.

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