US Stocks: Tesla reports $721 million of earnings in 2020

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Updated: January 29, 2021 12:14 PM

Tesla has reported annual net income of nearly $721 million against a loss of $862 million in the previous year.

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Tesla has released its financial results for the fourth quarter and full-year ended December 31, 2020. For the first time, Tesla has reported annual net income attributable to common stockholders GAAP) of nearly $721 million against a loss of $862 million in the previous year.

Tesla (TSLA) stock price was at around $835.43 down by about 3.32 per cent when the market closed yesterday. The share price of Tesla is up by nearly 500 per cent over the past 12 months.

The total revenue grew 46% YoY in Q4 which was primarily achieved through substantial growth in vehicle deliveries as well as growth in other parts of the business. At the same time, vehicle average selling price (ASP) declined by 11% YoY as our product mix continued to shift from Model S and Model X to the more affordable Model 3 and Model Y.

The operating income improved in Q4 compared to the same period last year to $575M, resulting in a 5.4% operating margin. This profit level was reached while incurring SBC expense attributable to the 2018 CEO award of $267M in Q4, driven by an increase in our market capitalization and a new operational milestone becoming probable.

Positive impact from volume growth and regulatory credit revenue growth YoY was mainly offset by lower ASP (including price reduction of China-made Model 3 and price reductions of Model S and Model X before the introduction of updated models) but also by a series of notable items. These included a portion of Q4 SBC charges, vehicle warranty accruals, additional supply chain costs, Model S and Model X changeover costs and other items.

Quarter-end cash and cash equivalents increased to $19.4B in Q4, driven mainly by recent capital raise of $5.0B (average price of this offering was about $632/share) and free cash flow of $1.9B, partially offset by early debt repayments (early conversion of convertible notes).

As per the results uploaded on the company website, here is what the company had to say about its performance in 2020:

“In addition, we continued to improve our products and make progress on our long-term roadmap. We ramped Model 3 in China to over 5,000 cars per week and started production of Model Y at Gigafactory Shanghai less than a year after breaking ground on the expansion. We also launched and ramped Model Y in Fremont in 2020.

In Berlin and Austin, we remain on track to start vehicle production this year with structural batteries leveraging in-house battery cells. Our engineering team has made significant progress on Full Self Driving (FSD) software, with a limited release to customers. Finally, we are excited to ramp the updated Model S and Model X and deliver our first Tesla Semi by the end of the year.”

The stock price of Tesla has seen a dip after the results were announced. One may look to invest as the long term prospect of the company remains intact. Open a foreign brokerage account and you can start investing in US stocks from the comfort fo your home or office in India.

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