Tesla reports higher profits, says expansion on track

AFP

Tesla reported a jump in first-quarter profits on Monday on surging electric vehicle sales, and the manufacturer said it was on track to boost automotive capacity at factories in three countries.

Elon Musk's electric car company has faced questions in recent days following a fatal car crash in Texas and sharp criticism of the company on social media in China.

But Monday's results were strong as Tesla essentially maintained its output from the fourth quarter despite "multiple" challenges that included the semiconductor shortage that has roiled the auto industry worldwide.

The company reported first-quarter profits of US$438 million compared with US$16 million in the year-ago period, following a 74 percent rise in revenues to US$10.4 billion.

Tesla suggested it had escaped the worst of the semiconductor supply crunch, which has temporarily curtailed production at rival companies, saying it navigated the problem "in part by pivoting extremely quickly to new microcontrollers, while simultaneously developing firmware for new chips made by new suppliers."

Tesla, which was co-founded by Musk with the mission of remaking the automotive market, noted the stream of new electric models unveiled by rivals including Detroit's "Big Three" automakers and US President Joe Biden's promotion of electric car usage.

"We believe consumer confidence in electric vehicles continues to increase and more customers are willing to make the switch," Tesla said.

"Our Q1 order rate was the strongest in our history and we are moving as quickly as possible to add more production capacity."

Musk also has expressed confidence in Tesla's allure to consumers as the electric car market faces more competition.

Tesla said a production ramp-up in Shanghai is "progressing well," while a new factory in Germany remains "on track" for production and deliveries in late 2021. A new factory in Texas also is on pace to begin production this year, the company said.

Musk was expected to speak at a conference call later on Monday to discuss the results. While the earnings topped estimates, the company has faced scrutiny over its "Autopilot" technology following crashes.

Last week, two federal agencies said they would investigate a fatal accident involving a Tesla that apparently had no one behind the wheel. That was followed by a story in Consumer Reports in which testers demonstrated that a Tesla could be fooled into driving with no one behind the wheel.

Tesla also found itself in a firestorm in China last week after a woman wearing a T-shirt with the brand's logo and the words "brake failure" climbed atop a Tesla model at the Shanghai auto show.

Tesla pledged to cooperate with an investigation launched by the city of Zhengzhou,central China's Henan Province, where the woman is from.

Shares of Tesla fell 2 percent in after-hours trading to US$738.20.