Yahoo Finance Tesla posts record profits as Musk hails 'breakthrough year'
Tesla has announced a record annual profit following a surge in demand for electric cars that has made its chief executive Elon Musk the world's richest man.
Full-year profits rose almost sevenfold to $5.5bn (£4.1bn) and sales soared 71pc to $53bn, both shattering Tesla’s previous records and making 2021 a “breakthrough year”.
Deliveries climbed by 87pc, which the company said pushed its margins above other car manufacturers in a demonstration that electric vehicles can be more profitable than combustion engine vehicles.
Tesla sold a record 936,000 cars last year as its Model 3 became the second-most popular vehicle in the UK and the most popular electric car in Europe.
Shares dropped 3.4pcpc to $907 in after-hours trading, having closed 3.5pc in anticipation of the results. Wednesday’s closing price valued the US business at $930bn. The stock had retreated nearly 15pc in three prior sessions.
Wall Street had forecast profits to hit $5.3bn on around $53bn of sales last year.
The company said it aims to increase production “as quickly as we can” by ramping up operations at new factories in Austin and Berlin, as well as by boosting capacity in Fremont and Shanghai. It is seeking to increase vehicle deliveries by 50pc each year.
Tesla added that self-driving software remains one of the “primary areas of focus” and that over time this will help grow profits. Early versions of the system were released to thousands of drivers in the US last year.
The company has also been ramping up production of its solar energy equipment, increasing deployments by 68pc to 345 MW.
Tesla capitalised on massive global interest in electric vehicles last year amid a global push for net zero, managing to avoid the worst of the worldwide microchip shortage that halted production at other carmakers.
However, it still warned that its factories have been running below capacity for several quarters and disruption is likely to continue through 2022.
Mr Musk, already worth $240bn, could earn up to $35bn in share options this year if Tesla hits a series of sales and profit targets. Last year he moved the company's headquarters from California to Texas, which has lower state taxes.
Tesla's sales have grown as the company, which started as a luxury electric vehicle maker, moves into the mass market with its Model 3 and Model Y cars.
Last month it also became the best-selling marque in Britain with a 9pc share of the market. VW was on 8pc and Audi 7pc.
Electric cars have grown from less than 3pc of new sales two years ago to 26pc last month, amid falling prices and regulations encouraging cleaner transport.
Despite growing sales, Tesla has faced delays to its upcoming Cybertruck pickup and sporty Roadster, as well as its promised Semi lorry.
Last month it was forced to recall almost half a million vehicles in the US. It asked for the return of 356,309 Model 3 vehicles over problems with their rear-view cameras, and a further 119,009 Model S vehicles because of potential issues with their front boot.
