American EV manufacturer plans to substantially ramp up global production off the back of record year
Tesla has hailed 2021 as “a defining year” as its full year financial reports reveal it doubled pre-tax earnings year-on-year and delivered 87% more vehicles.
“There should no longer be doubt about the viability and profitability of electric vehicles”, said the EV manufacturer in its earnings report, in which it also outlined plans to significantly ramp up its global production capacity in the coming years.
The firm reported annual revenues of $47.2 billion last year, a 73% year-on-year increase compared to 2020, its previous record year. Gross profit increased by 105% to $13.6 bn, as a result of its operating margins nearly doubling.
Tesla notes that in the third quarter of 2021 (“the last widely reported quarter”) its operating margins were higher than any other volume OEM, with its production cost-per-vehicle dropping to around $36,000 (£26,700).
Tesla attributes the growth in revenues to increased vehicle deliveries and “growth in other parts of the business”, while profitability was boosted by reduced manufacturing costs, increased deliveries and more profitable leasing and service operations.
Negative impacts on profit included rising raw material prices, logistical costs and a recall of nearly half a million Model S and Model 3 cars to fix faults with the rear-view camera and boot lid.
Notably, it says its own factories “have been running below capacity for several quarters” in light of the supply chain crisis, and expects this to continue through 2022.
Overall, Tesla delivered 24,980 examples of the Model S and Model X – winding down production of its two most expensive cars in line with both planned updates and semiconductor supply issues – and 911,242 examples of the cheaper Model 3 and Model Y.
Overall, the manufacturer delivered 936,222 cars last year, up 87% from the 499,647 it supplied in 2020.
The firm notes that in the fourth quarter its output was still hindered by “global supply chain, transportation, labor and other manufacturing challenges” which restricted capacity. But Tesla plans to start building the Model Y on a new line in Texas imminently and to boost capacity at its Fremont, California plant beyond 600,000 units annually, in line with its belief that “competitiveness in the EV market will be determined by the ability to add capacity across the supply chain and ramp production”.
Tesla’s new factory in Shanghai ramped up production of the Model 3 and Model Y throughout 2021, which was “essential for reducing the cost per vehicle and improving the stability of the global supply chain”, while an eventual green light from authorities to begin building cars at a new Berlin factory will see the firm add capacity in Europe for the first time.
Over the next few years, Tesla expects to boost vehicle deliveries by 50% and says it has “sufficient liquidity” to fund its product roadmap, expansion plans and other expenses.
Besides confirming that it is “making progress on the industrialisation of Cybertruck” in Austin, Texas, however, the firm has yet to make any concrete announcements on the launch of its radical EV pick up, the Roadster sports car or long-promised £17,000 hatchback.
Keyword: Tesla profits and deliveries soar in 2021 despite chip crisis