Tesla reported net income of $438 million in the first quarter

On Monday, Tesla reported a 74 percent jump in revenue to $10.4 billion and a net profit of $438 million in the first quarter of the year, up sharply from $16 million in the same period last year.

The Wall Street Journal reported on April 27 that according to analysts surveyed by FactSet, Wall Street had previously expected Tesla to report sales of about $10.5 billion and net income of about $509 million in the January-March period, on average.

Tesla said it delivered 184,877 vehicles in the first three months of the year, more than double the amount delivered in the same period a year earlier. Tesla delivered nearly 500,000 vehicles in 2020, and the company reiterated its expectation that deliveries will improve by more than 50 percent this year.

Tesla CEO Musk said, “We are targeting 500,000 Model 3s per year and believe the Model Y is likely to be the best-selling car in 2022.”

Musk said during the conference call that Tesla’s supply chain faced tough challenges in the first quarter, with chip shortages being a “huge issue” and a quarantine rule for the Communist Party’s virus outbreak that prevented key engineers from traveling to China and hampered production in China, some of which will continue in this quarter and the next .

Tesla said the company has managed to reduce the cost of building vehicles, thus offsetting the impact of lower average vehicle prices.

Tesla’s success in popularizing electric cars has helped it grow into the world’s highest-valued automaker by market capitalization. Tesla’s shares have soared more than sevenfold in the last year. 2021 Tesla shares are up about 4.5 percent cumulatively, and the stock rose 1.2 percent before announcing results Monday, retreating more than 2 percent after the bell.

Tesla’s success has also spurred traditional car companies and startups to develop models to compete with it, some of which are showing early signs of eroding Tesla’s market share.

Tesla vehicles accounted for about 70 percent of all-electric vehicles sold in the U.S. in the first quarter, down from about 82 percent a year earlier, according to research firm Cox Automotive Inc.

However, global demand for electric vehicles continues to grow and Tesla is adding capacity to keep up with demand.

Tesla said it remains on track to begin producing cars this year at new car plants near Austin, Texas, and outside Berlin; the Berlin plant is Tesla’s first factory in Europe. Tesla has expanded capacity at its first overseas plant in Shanghai to start delivering China-built Model Y cars this year after starting with the Model 3 sedan in 2019.

Along with the strong first-quarter results, Tesla faces a number of challenges. Federal auto safety officials are investigating a fatal fire accident involving a Model S sedan in Texas earlier this month. Local officials have said neither victim was sitting in the driver’s seat of the car at the time. The National Highway Traffic Safety Administration’s investigation into the crash is one of more than 20 investigations into accidents involving Tesla vehicles.

The Wall Street Journal reports that the crash raises questions about whether or how the car could have operated if no one was in the driver’s seat.

A Tesla executive said the company is cooperating with local and federal authorities in the investigation.

He said in a conference call that the car had a warped steering wheel, meaning someone may have been in the driver’s seat at the time of the accident.

The executive said Tesla is conducting a study with authorities in an attempt to replay possible scenarios of the accident in the study. Tesla said the assisted driving feature that helps control direction was not activated in the study, and the adaptive cruise control feature was activated when the driver was wearing a seat belt and going above 5 mph.

Officer Mark Herman of the precinct where the crash occurred would not comment on Tesla’s claims that someone may have been in the driver’s seat at the time of the accident, saying the accident is still under investigation.