Tesla realized strong growth of both sales and profit

Several media including BBC reported that Tesla increased its profits in Q2 2021. Especially, company’s sales rose to $12bn in the three months to the end of June. This amount is up from $6bn a year ago, when its US factory was shut down. As we see the other article, the US company delivered a record 200,000 cars to customers in the same period. Also, public support for greener cars in many countries had a good impact on this result.

Furthermore, Tesla made its business more profitable. Profits for the second three months of the year were $1.1bn, up from $104m last year. This was because the sales of its cheaper Model 3 sedan and Model Y were increasing.

In Investor Relation, Tesla said: “Public sentiment and support for electric vehicles seems to be at a never-before-seen inflection point. We continue to work hard to drive down costs and increase our rate of production to make electric vehicles accessible to as many people as possible.

In addition, the company referred its supply chain. How quickly it could produce cars would depend on the supply of key parts of its vehicles. This is because the demand is at record levels.

Who is Tesla?

Tesla is an American electric vehicle and clean energy company based in Palo Alto, California. Tesla’s current products include electric vehicles, battery energy storage from home to grid-scale and solar panels. The company also offers solar roof tiles as well as other related products and services.

In 2020, Tesla had the highest sales in the plug-in and battery electric passenger car segments. In fact the number is 16% of the plug-in market, which includes plug-in hybrids, and 23% of the battery-electric market.

Record Year of EVs

Many years ago, like 2010s or 2000s, only few people expected that electric vehicles were global phenomenon. However, the products are not luxury ones but getting to commodity in 2021. Of course, many national governments give incentives to people to purchase EVs. However, we live in the climate crisis or climate emergency era, so electrification for automotive is unavoidable. We can see this trend in other examples.

One example is Honda, which is one of the Japanese automotive giants. The Japanese company is very famous for its technology of gasoline engines. Therefore, we can easily understand that the company persists in its core technology. This is because it has long history, and many people show strong affection and have pride in it, too. If we make lots of effort to produce something, it seems natural that we are proud of the product.

However, the Japanese automotive giant made a bold decision against electrification. The company tries to be all electric by 2040. Probably, some employees in the company think of the decision as silly. This is because electric vehicles have no engines. It means that Honda will through away its core technology that the company has invested for more than decades.

This example shows how serious electrification in the automotive industry is. What’s more, strong sales and profit of Tesla verifies the seriousness. The companies in the industry must catch up with this transformation, but the question here is: How to win the new game?