Tesla sees sales soar despite supply chain woes – but warns ‘outside factors’ could affect further growth

Business

Tesla said it had battled chip shortages, port congestion and rolling blackouts as it reported better-than-expected sales – but warned “outside factors” could hold back further growth.

The electric car maker, led by billionaire Elon Musk, also boosted its profitability in the third quarter despite a 6% fall in the average selling price of its vehicles amid a shift to cheaper models – as it pared back costs.

Revenues of $13.76bn for the July-September period were 57% higher than a year earlier and above analysts’ expectations of $13.63bn.

Elon Musk with a Tesla Model S. Pic: AP
Image:
The company is led by billionaire Elon Musk Pic: AP

Bottom-line profits of $1.62bn were nearly five times higher than for the $331m figure for same quarter in 2020.

Tesla achieved another quarter of record deliveries, at just over 241,000, with production at its Shanghai factory ramping up, adding to its output in California – while sites in Texas and Berlin are expected to start rolling out vehicles by the end of the year.

But like other car makers it has experienced shortages of computer chips and raw materials.

Tesla said: “A variety of challenges, including semiconductor shortages, congestion at ports and rolling blackouts, have been impacting our ability to keep factories running at full speed.”

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The company said the quarter had seen “a continuation of global supply chain, transportation and other manufacturing challenges”.

“We continue to run our production lines as close to full capacity as conditions allow,” Tesla said.

A woman charges a Tesla car in front of the electric vehicle maker's showroom in Beijing, China January 5, 2021
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Tesla ramped up production in China

“While sequential growth remains our goal, the magnitude of growth will be determined largely by outside factors.”

It said the rate of growth “will depend on our equipment capacity, operational efficiency and the capacity and stability of the supply chain”.

Shares edged 0.5% lower in after-hours trading.

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