Tesla posts record Q3 earnings, passes $900bn valuation

Tesla recorded improved margins of 30.5% in its record-high Q3 earnings

Tesla logo on a Model X                                 
Tesla recorded improved margins of 30.5% in its record high third-quarter earnings – Photo: Shutterstock

Elon Musk’s electric-vehicle firm Tesla reported record third-quarter earnings after the markets closed on Wednesday 20 October.

The boost in revenue was largely aided by its competitors facing slower than usual production times and product shortages due to the global pandemic, which has enabled the electric vehicle (EV) market to surpass a market valuation of $900bn.

Tesla is now one step closer to a $1trn market valuation. 

Supercharged earnings

Tesla enjoyed a good third quarter, with a $1.6bn GAAP net income for the quarter and total revenue growing 57% year on year in Q3. This was primarily achieved through growth in vehicle deliveries, as well as growth in other parts of the business.

Automotive gross margin improved to 30% this quarter due to increased volumes of Tesla’s Model Y production. Operating income hit $2bn in Q3 compared with the same period last year, resulting in a 14.6% operating margin – an increase due to the growth in vehicle volume and cost reduction.  

Tesla’s shares have been on a steady increase throughout the year, boosted by the strong demand for electric cars, deliveries of its Model Y deliveries, and development of its subsidiary business functions such as energy and storage facilities.

The Palo Alto, California-based company produced just under 238,000 vehicles and delivered more than 240,000 vehicles in the third quarter.

“We achieved our best-ever net income, operating profit and gross profit. Additionally, we reached an operating margin of 14.6%, exceeding our medium-term guidance of ‘operating margin in low-teens’,” the company said in a statement outlining its Q3 results.

“We plan to grow our manufacturing capacity as quickly as possible. Over a multi-year horizon, we expect to achieve 50% average annual growth in vehicle deliveries.”

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