Tesla’s fourth quarter brought in a record windfall, as the company announced Wednesday that it turned a $2.3 billion profit.
It was the company’s second year finishing in the black, but it significantly improved over last year’s fourth-quarter profit of just $270 million. The company ended this year with $5.5 billion in net income, compared to $721 million in 2020. Tesla turned that profit on just over $17.7 billion in revenue and did it while its average sales price continued to drop due to the increasing popularity of the more affordable Model 3 sedan and Model Y SUV.
Tesla produced 305,840 vehicles in the fourth quarter, a 70 percent increase over the previous year. For the entire year, the company delivered 936,172 vehicles, just shy of the promised 1 million vehicles but still an increase of 87 percent over the previous year.
“2021 was a breakthrough year for Tesla,” the company declared. “There should no longer be doubt about the viability and profitability of electric vehicles.”
Tesla has also continued to increase the profitability of its vehicles. The company said that the gross margin on its cars is holding steady at 30 percent, similar to the previous quarter. And the amount of regulatory credits it sold this quarter went up slightly compared to the previous quarter ($314 million this quarter, versus $279 million in Q3).
In its earnings release, the carmaker cautioned that the pace of production at its new Texas and Germany factories may be limited by supply chain problems and “regional permitting.” Still, Tesla says it is “making progress on the industrialization of Cybertruck.”
The company said its first Model Y vehicles to be made at its new Austin, Texas factory were nearing completion. After certification, Tesla said it expects to begin making customer deliveries of its new Texas-made Model Ys.
Tesla also highlighted its controversial Full Self-Driving product as “a primary area of focus.” FSD is a beta version of an advanced driver-assist system that controls some of the car’s functions on local roads but still requires human supervision. In contrast, autonomous vehicles are cars that can operate on public roads without any human intervention or supervision.
Still, the company claims that FSD will lead to more profits in the future thanks to the “higher utilization of our vehicles.” Tesla CEO Elon Musk has said that once Tesla’s cars are able to drive themselves, the company will leverage that capability into a “robotaxi fleet.” The goal is to make it so that each Tesla customer’s car can double as an autonomous vehicle that other people can hail while the owner isn’t using it.
Tesla said it released seven over-the-air software updates for FSD over the quarter. There are currently 60,000 vehicles operating with the advanced driver assist system in the US.
George is Digismak’s reported cum editor with 13 years of experience in Journalism