This morning Tesla earnings for the first quarter of 2021 were released. On the back of record production and delivery numbers. While the Model 3 continued to be the best-selling premium sedan in the world, Tesla goes on to say that they believe Model Y can become not just a category leader, but also the best-selling vehicle of any kind globally.
Financially the quarter had some positives and negatives, with Automotive revenues at $9.002B which is up from $5.132B from Q1 2020, but down from the $9.314B in Q4. There were $518M of regulatory credits, paid to Tesla from other automakers who are not yet producing enough of their own electric vehicles to meet emission standards.
Automotive Gross Margin grew to 26.5% this quarter, beating the majority of quarters last year, with the exception of Q3 2020 where it peaked at 27.7%.
The total Revenue for the company was $10.389B, with a gross profit of $2.215B. For a company selling every car they can make, the focus is clearly on expanding production with their two new factories and that comes at a cost.
The capital expenditure jumped to $1.348B, up from $455M year-on-year, but when all said and done, Tesla still has $17.141B in the bank as cash or cash equivalents. Free Cash Flow dropped considerably this quarter to $293M, down from $1.868B in Q4 2020, so we’ll have to wait for the earnings call for an explanation on that.
For those crypto fans, Tesla registered a net cash outflow of $1.2B related to Bitcoin in Q1.
When it comes to the energy side of the business, Tesla deployed 92MW of solar and 445MW of battery storage (Megapack, PowerPack and Powerwall). This was a year-on-year growth of 163% and 71% respectively. It is worth noting that Tesla also grew the number of Supercharger stations to 2,699 with a total of 24,515 connectors (accounting for the number of stalls at each location).
One of the big questions Australians have is when are we getting Model Y. The shareholder deck contains a reference to the Shanghai expansion which hints at some positive news on that front.
Model Y ramp in Shanghai is progressing well. We expect that our Shanghai factory will continue to increase quarterly production output through the year. We recently improved our domestic supply sourcing ratio to over 90%. Vehicle exports to Europe and APAC continue to progress as planned.
While that doesn’t leave us with a specific launch date for the Model Y in Australia, I’d expect orders to go live around Q3 this year and deliveries to start in Q1 or Q2 of 2022. With SUVs accounting for a majority of the vehicle segments in Australia, this would definitely be a welcome addition to the Model 3.
When it comes to the expansion of the Full Self Driving (FSD) beta rollout, Tesla owners who have purchased the FSD package are keen to know when they’ll get access to the next release. Tesla says,
Our team continues to focus on the V9 version of FSD City Streets beta, which will soon become more widely available in the United States. We believe that a vision-only system is ultimately all that is needed for full autonomy.
Our AI-based software architecture has been increasingly reliant on cameras, to the point where radar is becoming unnecessary earlier than expected. As a result, our FSD team is fully focused on evolving to a vision-based autonomous system and we are nearly ready to switch the US market to Tesla Vision.
That line about the US is to be expected, however I do hope Tesla remember FSD owners around the world paid for the package and are ready and waiting to help test the Beta release. It’s understandable an American-based company would want to develop and roll out the software locally first, but solving autonomy is a global challenge.
There was no mention of the V11 software update in the shareholder deck, but that may be something that emerges from the earnings call, which you can listen to here.
Something we don’t typically see is a breakout of the brands that people are trading in to buy a Tesla. With 98% of these being ICE, it’s clear the discussions around EV competition are not relevant. It appears Toyota, Honda and Ford make up a significant share of the trade ins, all of which are non-premium brands. As more direct competitors (in the same ballpark price wise), there’s Audi, Lexus and BMW, while I imagine Mercedes comes under the Other premium brands segment.
In the Shareholder deck, we also got fresh images of Tesla’s Gigafactories in Berlin and Texas, which both look to be progressing well, something we already knew from drone videos on YouTube. It is expected these factories will both come online during 2021, the only question is when.
Berlin will make the Model Y and Texas will make the Model Y and Cybertruck. Tesla Semi, Roadster and a future product (the US$25,000 compact), are still listed as ‘in development’ without an official build location.
You can read Tesla’s Q1 2021 shareholder deck at Tesla Investor Relations.
