Ella Musk’s Tesla started the year firmly with a profit and recorded highest delivery of its electric cars.
It emerged despite production constraints due to a global shortage of chips that have already plagued other car manufacturers.
Mr Musk said the shortage of the chip had created “procurement challenges”, although that “specific problem” had subsided.
First Quarter Results
Profits for the first three months of the year were $ 438m (£ 315m), up from $ 16m last year, strengthened by Bitcoin sales and environmental credit.
But the profits were dented by a $299m payment to Mr Musk as part of a controversial compensation plan struck in 2018.
Revenue rose to $ 10.4bn, up from $ 6bn in the same quarter last year.
Mr Musk said Tesla’s Model 3, with its midsize sedan, was the “best-selling luxury sedan of any kind in the world” for the quarter.
He also predicted that the company’s midsize sport utility Model Y would be a best-selling car of any kind in the coming years.
The EV Trend
“We’ve seen a real change in the perception of consumers of electric vehicles, and our demand is the best we’ve ever seen,” Mr Musk said.
The company said the Model Y has so far received much acceptance from Chinese consumers, where Tesla began production last year.
China is probably the world’s most competitive market for electric vehicles, with hundreds of manufacturers vying for a segment of the growing market.
Bitcoin Sale
However, not all of the company’s revenue comes from selling cars.
The company bought $ 1.5bn of Bitcoin in the first quarter, but then cut its position by 10%, which contributed $ 101m to its value.
Tesla recently enabled customers to buy cars with Bitcoin, allowing them to earn more cryptocurrency.
“It is our intent to hold what we have long term and continue to accumulate Bitcoin from transactions from our customers as they purchase vehicles,” the company’s chief financial officer, Zachary Kirkhorn, told investors.
Environment Credit Sales
Tesla also earns credits for exceeding emissions and fuel economy standards and then selling them to other carmakers that fall short so they can avoid penalties.
The company earned $ 518m from sales of those credits in the first quarter, an increase of 46% over the same quarter in 2020.
Tesla said it delivered about half a million cars by 2020, and 185,000 in the period January to March.
The company expects its supply to increase by 50% annually, and is increasing production at its existing facilities in California and Shanghai while building its new factories in Berlin and Texas.
Competition And Critics
However, the company produces far fewer cars than companies like Toyota and Volkswagen, where each sold more than nine million cars last year.
“Investors can argue that if they wanted to be exposed to Bitcoin they would have bought it and did not need Tesla to do it for them.
“However, Tesla has never played with the rules – so far that has not stopped them from being a winner.”
