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Tesla's Record Profits Were Without Emission Credit Sales to Other Automakers

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【Summary】While this is the eighth profitable quarter in a row for Tesla, it’s the first time the automaker can claim to be a profitable brand on just its vehicles alone.

Original Vineeth Joel Patel    Aug 01, 2021 4:00 PM PT
Tesla's Record Profits Were Without Emission Credit Sales to Other Automakers

One of the main concerns with electric vehicles for automakers is that they're not profitable — at least not at the moment. Investing millions, and in some cases, billions into electrifying a lineup is a scary thought that's being done on a leap of faith. Tesla got a head start on every other automaker and still has to use other sources of income to turn a profit. That was, until the second quarter of this year.

Tesla Hits A Major Milestone

It's taken Tesla many years, but the American automaker has finally turned a profit without counting the sale of emissions credits that it sells to other automakers. This is a huge milestone for Tesla, as it marks the fist time in Tesla's existence that it's been able to do this. It also a good sign for other automakers that are looking at becoming all-electric brands in the near future.

Earlier this week, Tesla shared that it made a $1.1 billion profit in the second quarter of 2021. Of that figure, $354 million came from the sale of emissions credits to other automakers. The rest came from automobile sales and energy storage sales. These figures are even more impressive with the news that Tesla lost $23 million on its Bitcoin bet. Additional things that stopped the automaker from turning a higher profit include the delayed rollout of the updated Model S and Model X and the chip shortage. All-in-all, Tesla recorded a revenue of $11.9 billion in the second quarter.

Once again, the Model 3 and Model Y led the way forward for sales. Tesla groups the two vehicles together when it comes to sales with both accounting for over 200,000 units delivered. The Model S accounted for just 1,895 units delivered.

Things Should Only Improve

While it's good news for Tesla, it's hard to see which models are doing well in what areas. Tesla doesn't provide more specific information on sales figures based on country or by specific models in those countries. The automaker did say that its factory in China is its "primary vehicle export hub." So, the automaker could be doing very well in other parts of the world.

Tesla's sales figures and revenue are expected to increase once its factories in Texas and Germany go online. Reports indicate that progress on the Texas factory is going smoothly, while things in Germany are moving a lot slower. Once these factories are up and running, they'll take a lot of stress off the automaker's California plant. Additionally, prices of the vehicles should go down as more vehicles are being built.

Unfortunately, focusing on getting production to where it should be means a few vehicles will be getting delayed. Reports indicate that the Semi truck and Cybertruck will be delayed until 2022. While that's unfortunate, it should help Tesla produce more Model Y and Model 3 EVs, which are clearly what it needs to sell vehicles.

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