Tesla Motors reported its first annual
profit Wednesday following a big jump in auto deliveries despite the upheaval
of the coronavirus pandemic as it signaled confidence for more growth in
Elon Musk’s electric car company — which has soared on Wall Street for
much of the last year — benefited from scaled-up production at factories in
California and China as it pushes forward with new plants in the state of
Texas and Germany that are expected to begin production in 2021.
“This past year was transformative for Tesla,” the company said in its
“Despite unforeseen global challenges, we outpaced many trends seen
elsewhere in the industry as we significantly increased volumes,
profitability and cash generation.”
Tesla reported 2020 profits of $721 million, compared with a 2019 loss of
Revenues for 2020 jumped 28 percent to $31.5 billion following a 36 percent
increase in auto deliveries to just under 500,000.
In the fourth quarter, the company reported profits of $270 million, up 157
percent from the year-ago period on a 46 percent rise in revenues to $10.7
That translated into profits of 80 cents per share, below the $1.01
projected by analysts.
The company did not offer detailed 2021 forecasts for sales or profit.
In terms of volume, “over a multi-year horizon, we expect to achieve 50
percent average growth in vehicle deliveries,” Tesla said. “In some years we
may grow faster, which we expect to be the case in 2021.”
The company’s chief financial officer, Zach Kirkhorn, said Tesla had been
affected by a shortage in semiconductors that has also hit other automakers,
but described the effect as temporary. Wedbush analyst Daniel Ives
characterized the results as “robust” in spite of the lower-than-expected
profit in the fourth quarter.
Ives interpreted the statement on 2021 volumes as implying deliveries of
between 750,000 and 800,000, enabling Tesla to reach one million vehicle
output in 2022.
CFRA Research analyst Garrett Nelson said the language on 2021 output “is
likely to be viewed negatively” compared with forecasts of just 796,000.
But Nelson described Tesla’s cost of capital advantage over other
automakers as “enviable.”
Moreover, policies by President Joe Biden’s newly installed administration
favoring electric cars “should prove to be a potent tailwind” for the
company, Nelson said.
Shares of Tesla now stand more than seven times their value from a year
ago, which has placed Musk in contention for world’s wealthiest person.
Forbes’ “real-time” billionaire’s list ranked Musk second on Wednesday
after Amazon chief Jeff Bezos but just ahead of LVMH chief Bernard Arnault.
Musk, during a conference call with analysts and investors, said “there is
a way to justify the valuation of the company” based on a rough calculation
of the potential boost from mass deployment of Tesla’s autonomous driving
Shares were down 5.1 percent at $819.70 in after-hours trading.