Has Tesla Turned the Corner?

When Tesla’s fourth-quarter earnings were published last week, they revealed its largest profit by a wide margin. Will the current undisputed king of US EV sales continue its upwards trajectory?

🪙 Credit where credit’s due: For years, Tesla has relied on other automakers purchasing emissions credits required by nearly a dozen states in order to boost revenue, to the tune of $4.45 billion since 2015.

• The EV-maker first became profitable without counting the sale of emissions credits starting in Q2 of last year. In the most recent quarter, such credit sales represented less than 14% of its net income ($314 million).

✋ Yes, but… Despite the recent good news, Tesla’s stock has dropped nearly 13% since reporting earnings, which many attribute to reports of new vehicle delays due to semiconductor chip shortages.

• The company won’t produce any new vehicles in 2022, meaning the Cybertruck is delayed again until at least 2023 – two years after it was first promised. Tesla also said it hasn’t started working on a long-awaited $25,000 electric car.

🔢 By the numbers: Even with last week’s dip in share price, Tesla currently has a valuation equal to the next 8 automakers combined (~$850 billion).

• Its EV market share in the US dipped from nearly 80% through the first six months of 2020 to 66.3% over the same period last year.
• Overall, EVs represented ~4% of automobile sales in the country last year.

👁️ Looking ahead… The company has reportedly commissioned next-gen EV batteries from Panasonic that’ll be cheaper than existing versions and give vehicles a 15+% longer range. Production is slated to start as early as 2023.