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The third-quarter results are impressive. Tesla generated $8.771 billion in revenue, which marks a 39% growth year-over-year.
On October 21, after markets closed, Tesla Inc (NASDAQ: TSLA) delivered its Q3 2020 earnings report. According to the company, the quarter was a record one on many levels. As Tesla managed to beat Wall Street expectations, its stock jumped by 3.25% after hours, to $436.37 from the close of $422.64.
Tesla Q3 2020 Earnings: Result vs Expectations
The third-quarter results are impressive. Tesla generated $8.771 billion in revenue, which marks a 39% growth year-over-year. Meanwhile, analysts’ estimated ceiling was $8.36 billion. Tesla explained this figure by substantial growth in vehicle deliveries as well as growth in other parts of the business. Automotive revenue made up $7.6 billion, about 91% of the total for the quarter. Adjusted earnings per share accounted for 76 cents compared with 57 cents expected.
Further, the company reported an improvement in operating income that reached a record level of $809 million and resulted in a 9.2% operating margin. Besides, it has boasted a $331 million GAAP net income and $809M GAAP operating income.
Tesla Increasing Vehicle Capacity
Apart from record profitability and free cash flow, Tesla has seen historic vehicle deliveries in Q3 2020. Earlier, the company reported production of over 145,000 vehicles and the delivery of almost 140,000 vehicles in the quarter.
Such performance resulted mainly from Tesla improving its capacity at both Fremont and Shanghai factories. In Fremont, the company restarted our second paint shop, installed the largest diecasting machine in the world, and upgraded our Model Y general assembly line. All this has led to an increase in the capacity of Model 3 / Model Y to 500,000 units a year.
In Shanghai, Model 3 production capacity has increased to 250,000 units a year. Besides, Tesla reduced its price to 249,900 RMB, making it the lowest-price and best-sold premium mid-sized sedan in China.
In 2021, Tesla is also planning to start manufacturing at its Gigafactory in Berlin.
“I should make a point that for Berlin and Austin, we do expect to start delivering cars from those factories next year but because of the exponential nature of the spool up of manufacturing plants especially one with new technology, we’ll start off very slow at first and then become very large.”
For 2020, Musk said that vehicle deliveries would be up 30% to 40% from last year.
Tesla Stock Performance
This year, Tesla stock has been one of the best market players. Before the Q3 2020 report, Goldman Sachs Group Inc (NASDAQ: GS) lifted its price target for Tesla shares from $400 to $450 while maintaining the ‘Neutral’ rating for the stock. Goldman Sachs bet on Tesla’s strong report and was right.
Year-to-date, Tesla shares are 405.15% up. Tesla’s market cap has totaled $393.9 billion.