TSLA Q2 2021 Earnings

Call Details

• Call Title: Tesla, Inc. Q2 2021 Earnings Call
• Date: July 26, 2021 at 9:30 PM UTC
• Management Team:
  • Martin Wiecka (Senior Director of Investor Relations)
  • Elon Musk (Chief Executive Officer)
  • Zachary Kirkhorn (Chief Financial Officer)
  • Lars Moravy (SVP of Vehicle Engineering)
  • Drew Baglino (SVP of Powertrain and Energy Engineering)

Call Summary

Financial Performance

• Q2 2021 GAAP net income surpassed over $1B for the first time in Tesla history.
• Auto gross profit and margin excluding regulatory credits increased substantially in the quarter.
• Over the last two years, vehicle delivery volumes have more than doubled.
• Average selling prices declined by more than 10% over the last two years due to affordability roadmap and mix shift.
• Auto gross margin excluding credits increased nearly 10 percentage points over the same two-year period to the highest level since Model 3 introduction.
• GAAP operating margins rose from negative to double digit, driven by reduced OpEx as a percentage of revenue and better fixed cost absorption.
• Analyst commentary on the call stated cost of goods sold per vehicle was in the mid-$37,000 range for the quarter.

Guidance

• For the remainder of 2021, growth rates will be determined by the slowest part of the supply chain, particularly a wide range of semiconductor chips.
• Elon stated that the duration of the chip shortage is difficult to predict and is largely outside Tesla's control.
• Tesla expects supplier contracts to roughly double cell output to Tesla in 2022, per comments on the call.
• Drew stated the target is to grow cell supply ahead of a 50% year-on-year vehicle growth target.
• Elon said the company feels confident of at least 50% vehicle growth year-over-year next year and that 100% is possible.
• Elon and Drew gave a view that Tesla will most likely hit an annualized rate of 100 GWh of cell production sometime next year, with Elon saying there is a better-than-50% chance to reach 100 GWh by end of next year.
• No specific near-term unit cost targets were provided for outcomes from the 4680 cell or structural pack ramps.