Driven by an increase in vehicle deliveries and sales of environmental regulatory credits to other automakers, the US-based electric vehicle (EV) makers Tesla Inc recorded its fifth consecutive quarterly profit on record revenue of $8.8 billion.
The electric car manufacturer also announced its goal of producing half a million vehicles by the end of this year, a goal that will require it to ramp up vehicle sales dramatically in the fourth quarter.
Tesla said it had the capacity installed this year to manufacture and deliver 500,000 vehicles, but added that it has become more difficult to achieve its objective.
In the broader automotive industry, Tesla defied a downward trend in 2020 and managed to kick a pandemic and economic upheaval with stable sales and profitable quarters, sending shares up by about 400 percent this year.
At $394.5 billion, despite the company trailing rivals in sales, revenue and profit, Tesla’s market capitalization has become the largest of all global automakers.
The growth of Tesla highlights consumer confidence in the future of electric vehicles and the shift of the company from a small carmaker to a world leader in clean cars.
But experts warned that Tesla’s lead could soon be narrowing down.
“The business is still incredibly valued, as if it works in a vacuum, but rivals are working furiously to catch up,” they said, referring to more than 400 new models of electric vehicles expected to reach the roads by 2024.
An electric version of its Hummer pickup truck that will compete with Tesla’s futuristic Cybertruck, was recently unveiled by General Motors.
In the meantime, Musk said that the Cybertruck orders will be delivered in 2022, or the earliest by the end of 2021.
In September this year, Tesla had outlined plans to reduce the cost of battery production by manufacturing larger in-house cells to power an increasing fleet, including bigger, more energy-intensive vehicles.
But Musk said recently, that before 2022 the company would not rely on internal cell production, indicating that Tesla would continue to rely on Panasonic, LG and CATL, who are its external battery suppliers.
He also said that by the end of this year, Tesla would roll out what it calls “Full Self Driving” more widely. The feature was launched by Tesla for an undisclosed number of “expert, careful” drivers in a pilot launch last day.
Environmental regulatory credits or points are given by the state and federal government for contributing zero pollution to the environment.
Since about a year ago, as California and other US states raised the mandatory share of zero-emission vehicles sold per manufacturer, these credits became a more important source of revenue for Tesla. The revenue is expected to dry up as rivals begin selling more electric vehicles.
With the slow recovery in the United States and Europe struggling with a second outbreak of the virus, some analysts have pinned their hopes for Tesla on China’s rise, which has begun to recover as consumers shake off the effects of the pandemic.
The carmaker said it will concentrate on improving the cost and quality of production and increasing capacity as rapidly as possible.
In Germany and the US, Tesla is building additional vehicles and battery plants to increase the production of existing vehicles and to introduce new models, including its Cybertruck and Semi Trucks.
It is expected that production at the German factory will start in 2021.