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<\/a>\nIn January, before the onset of the coronavirus pandemic, Tesla predicted it would \u201ccomfortably exceed\u201d deliveries of 500,000 vehicles for the full year, a 36% increase from 2019.<\/p>\n
The company\u2019s likely double-digit growth stands out in a year when global auto-industry deliveries are projected to be 14% below pre-Covid estimates and down 22% from last year, according to LMC Automotive.<\/p>\n
In addition to its mainstay Model 3 sedan and Model Y crossover, the company also manufactures the older and higher-priced Model X SUV and Model S sports sedan. Its flagship factory in Fremont, California, now has capacity to make 590,000 vehicles a year: 500,000 3 and Y and 90,000 of the S and X.<\/p>\n
Tesla said Wednesday deliveries of its Semi will start next year, four years after the big rig was first revealed. And Musk said initial production of the company\u2019s new Cybertruck pickup is on schedule to begin in late 2021.<\/p>\n
That batttery-powered truck will go head-to-head against General Motors Co\u2019s new electric Hummer and a pickup from Amazon.com Inc-backed Rivian Automotive Inc.<\/p>\n
Credit sales down<\/strong><\/p>\n Tesla\u2019s revenue rose to a better-than-expected $8.8 billion, even as sales of regulatory credits to other automakers fell to $397 million. That was down from $428 million in the second quarter.<\/p>\n \u201cRegulatory credits are a big part of the EPS beat,\u201d said analyst Ben Kallo of Robert W. Baird. \u201cBut that\u2019s part of the game: Tesla\u2019s competitors are paying them, and Tesla is reinvesting that into their factories in Berlin and Texas.\u201d<\/p>\n The electric-car maker earns money by selling credits to manufacturers that need them to comply with carbon-emissions standards in California, Europe and elsewhere. Investors view this revenue as a double-edged sword because they want to know Tesla can be profitable from its core business: making and selling cars.<\/p>\n When S&P failed to add Tesla to its index last month, Bloomberg Intelligence analyst Michael Dean said it could be due to \u201cquestion marks about the sustainability of regulatory emission-credit sales, which are currently underpinning earnings.\u201d<\/p>\n Self-sufficiency goal<\/strong><\/p>\n The strong profits could prompt the S&P Dow Jones Indices, which oversees the index, to add Tesla sooner rather than later, Garrett Nelson, an analyst at CFRA Research, said in a note to clients. \u201cWe think TSLA\u2019s fifth straight quarter of GAAP profitability raises the likelihood of the stock being added to the S&P 500 in the near term,\u201d he wrote.<\/p>\n Tesla cleared a big hurdle for inclusion in July when it reported a fourth consecutive quarter of profits, but S&P officials say the index isn\u2019t reconstituted on a pre-determined timeline and have declined to comment on any individual company.<\/p>\n During the earnings call with analysts, Musk spoke about Tesla\u2019s advantage when it comes to vertical integration, saying his goal is to eliminate all outsourcing so that the company\u2019s self-sufficiency is an order of magnitude greater than other automakers.<\/p>\n The company makes many of its own parts, as well as the machines that make the parts — or the \u201cmachine that makes the machine,\u201d one of Musk\u2019s favorite phrases. He said that rival carmakers rely too much on \u201ccatalog engineering\u201d and as a result their products are not very unique or as adventurous.<\/p>\n
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