Tesla (NASDAQ: TSLA) announced its 2021 Q2 financial results on July 26th. According to the announcement, total revenue, operating income and net income were up 98%, 301% and 998%, respectively (YoY, 3 months). Adjusted EBITDA was up 160% (YoY, 3 months). In addition, EV production was up 151%. Moreover, EV delivery was up 121% (YoY, 3 months).
Tesla continues its efforts for scaling up its production and reducing costs. According to the announcement, the average selling price (ASP) was down 2%. It was mainly due to the increased production capacity of the Shanghai Giga factory. In addition, operating margin was also improved by 555bp. We evaluate Tesla’s efforts as improving both operating margins and total asset turnover through “process innovation”. Tesla is still constructing Giga factories around the world, including that in Berlin. We believe that Tesla will continue to reduce costs and expand production scale drastically.
Finally, Tesla has successfully launched full self driving (FSD) subscription program. FSD subscription is expected to contribute significantly to improving Tesla’s earnings in the future.
- Watanabe & Brothers’ Investment is holding shares of Tesla.
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