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Tesla Q2 2021 Results Reveal Profit Without Regulatory Credits

Tesla has been presenting profitable quarters since Q3 2019. The issue is that profit came in most cases from regulatory credits – money that automakers that can’t meet carbon emission rules pay to benefit from Tesla’s numbers. In Q2 2021, the company has presented profits that do not rely on those credits for the first time: it was in the black for $1.142 billion (GAAP) and received only $354 million in carbon credits.
Tesla Q2 2021 Financial Results 7 photos
Photo: Tesla
Tesla Q2 2020 Financial ResultsTesla Q2 2021 Financial ResultsTesla Q2 2021 Financial ResultsTesla Q2 2021 Financial ResultsTesla Q2 2021 Financial ResultsTesla Q2 2021 Financial Results
In other words, Tesla presented $788 million in profits that did not require carbon credits to help. Compared to Q2 2020, it was a 998% improvement. The company attributes these good results to “volume growth and cost reduction” and says that it could have done even better if it was not for “growth in operating expenses including increased SBC, Model S/X ramp (negative margin in Q2), additional supply chain costs, lower regulatory credit revenue, Bitcoin-related impairment of $23M and other items.”

Curiously, Elon Musk recently said Tesla would accept bitcoins again if it decided it was clean enough. Among these SBC (stock-based compensation) expenses, Tesla had to pay the “2018 CEO award of $176M in Q2.” If Musk did not make almost $200 million, the company would have made even more money.

That’s very positive news for Tesla, which broke its record by delivering 201,304 units and producing 206,421 of its EVs. In these cases, the better numbers respectively represented increases of 121% and 151%. All that led to an operating margin of 11% and to the first time its GAAP net income was over $1 billion.

Giga Shanghai and the Model Y produced there have proven to be instrumental for that. According to Tesla, its Chinese factory has become its “primary vehicle export hub” because of “strong U.S. demand and global average cost optimization.” Summing up, its vehicles are cheaper to make and ensure beefier profit margins that Tesla is finally disclosing without the need for credits of any sort. Stockholders and fans (they are generally the same) must be proud.
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 Download: Tesla Q2 2021 Financial Results (PDF)

About the author: Gustavo Henrique Ruffo
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Motoring writer since 1998, Gustavo wants to write relevant stories about cars and their shift to a sustainable future.
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