Tesla Doubles Quarterly Profits Amid Pandemic

Tesla has more than doubled its third-quarter profits, delivering a record number of electric automobiles despite the pandemic. Tesla

By Kristie Pladson

U.S. electric carmaker Tesla has more than doubled its third-quarter profits, the company has announced, delivering a record number of electric automobiles amid a pandemic that has crippled fellow automakers.

In a letter to investors, the company said it delivered 139,300 vehicles in the third quarter, a new quarterly record. It aims to have produced and delivered 500,000 cars by the end of the year.

Net profits in the third quarter reached $331 million, more than twice the $143 million posted at the same time a year earlier. Revenue went up nearly 40% to $8.7 billion, exceeding analysts' expectations.

The value of Tesla shares — which have increased fivefold since the beginning of the year — were up 4.3% to $440.81 in extended trading, news agency Reuters reported.

This marks the fifth straight quarter of profits for the company. As of September, Tesla reported making $451 million in 2020 and seems on course to post its first annual profit.

CO2 Offset Sales Still Key

An uptick in demand abroad countered a drop in US car sales of nearly 10% over the last year; global deliveries increased 44% in the third quarter.

But Tesla still partly owes its success to competitor carmakers: as in past quarters, the electric car company's profits relied on the sale of CO2 credits to fellow carmakers, which allow them to offset their emissions and reach government climate targets. Valuing $331 million in the third quarter, Tesla would not have been profitable otherwise.

Competition Heats Up

While traditional automakers are suffering in a global economy marked by a pandemic, Tesla is no longer alone in its electric ambitions.

"The company is still incredibly highly rated, as if it were working in a vacuum. But the competitors are working like mad to catch up," said analyst Craig Irwin of Roth Capital Partners, pointing to hundreds of new battery-powered vehicles that are expected to be released by 2024.

Volkswagen group is investing over €40 billion ($47 billion) into developing an electric car portfolio, and other competitors have announced similar initiatives.

"With more electric vehicle launches on the horizon, Tesla has a big red target on its back," said Jessica Caldwell, executive director of insights for the Edmunds.com auto website.

In its letter, Tesla admitted that reaching its production targets "has become more difficult" and it will rely on of its Model Y small SUV as well as greater activity at its China plant.

Reposted with permission from Deutsche Welle.

EcoWatch Daily Newsletter
EcoWatch joins Fabien Cousteau to remove marine debris in the Florida Keys and talk about the future of the oceans. Tiffany Duong / Ocean Rebels

Much of what we've been able to learn about the underwater world has built on the legacy of underwater explorer and pioneer Jacques Yves Cousteau. In 1943, Cousteau invented the aqua-lung, which completed his self-contained underwater breathing apparatus (SCUBA). This technology forever changed how humans interact with the blue world and remains the precursor of modern-day scuba diving equipment.

Read More Show Less
Archeologists made their discoveries in the Karonga District in Northern Malawi. David Wright / University of Oslo

More evidence has emerged that humans have been altering the environment for much longer than the current climate crisis.

Read More Show Less
A gas flare at an oil well site outside Williston, North Dakota on July 26, 2013. Andrew Burton / Getty Images

By Brett Wilkins

The critical importance of reducing global methane emissions, including those generated by the fossil fuel industry, is more significant than previously understood, according to a report published Thursday by the United Nations Environment Program.

Read More Show Less
The long-term survival of Velvet Scoters remains in serious jeopardy. BoukeAtema / Getty Images

By Nika Paposhvili

The wide-ranging sea duck known as the velvet scoter can be found in the skies and waters of nearly a dozen European and Asian countries, but it has almost disappeared from some of them. Just a few years ago, it was thought that the geographically isolated breeding population of these birds in the Caucasus was completely extinct. But a study conducted on the Javakheti plateau in 2017 revealed that Lake Tabatskuri in Georgia still holds a small breeding population of just 25-35 pairs. The long-term survival of this tiny population remains in serious jeopardy.

Read More Show Less
Redwood trees in California. Rhett A. Butler
On Thursday, the Biden Administration formally laid out its vision for conserving 30% of America's land and waters by 2030.
Read More Show Less