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Why the Tesla share price has revved up today


Shares in the electric car maker are down 25% over the last 6 months.

Shares in electric car pioneer Tesla Inc. (TSLA: NASDAQ) have been a tepid performer over the last several months amid supply-chain challenges and rising competition. Overnight though, Tesla shares jumped 2.2% in US trading to US$657.62.

Why did the Tesla stock price rise today?

The bump up in its stock has come after Tesla reported record quarterly profit despite a global chip shortage that has limited production for many global automakers.

The company posted revenue of US$12 billion (AUD$16.3 billion) for the 3 months ending 30 June, nearly double from a year ago, and profit of US$1.1 billion, its eighth straight quarter of profits.

The numbers were far better than analyst estimates for US$11.4 billion in revenue and US$600 million in profit.

That came on the back of Tesla producing over 206,000 vehicles in the second quarter, more than double its output from a year ago, when the pandemic had limited production and demand.

The financial results were again bolstered by the sale of regulatory credits to rival automakers. The company earned US$354 million from regulatory credits during the second quarter, down from US$428 million a year ago.

Shortages weigh on outlook

Despite the upbeat numbers, Tesla said the ongoing supply chain challenges would dictate its growth in the second half of the year amid rising demand.

“For the rest of this year, our growth rate will be determined by the slowest part in our supply chain,” CEO Elon Musk said on an earnings call after the announcement.

“Chip supply is fundamentally the governing factor on our output.”

Auto sales have cooled globally in recent months amid a shortfall of semiconductors. Other automakers, including Ford and General Motors, have been forced to idle assembly plants due to supply constraints.

In a sign of the challenges, Tesla again delayed its semi-trailer truck with first deliveries now slated for 2022. The company attributed the delay to supply-chain issues and limited battery-cell supply. The company originally planned for its first pick-up truck deliveries in 2021.

Still, Tesla reiterated plans to boost its output by more than 50% this year on the back of new factories in the US, Germany and Shanghai and a program to produce battery cells in-house. The company delivered nearly half a million vehicles to customers last year. Analysts expect Tesla to continue to lift output to around 231,000 vehicles for the current quarter.

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