Tesla (NASDAQ: TSLA) is experiencing astonishing growth. For instance, Tesla’s quarterly revenues rose from $6.036 billion on 30 June 2020 to $11.958 billion on 30 June 2021.
Therefore, I estimate Tesla’s quarterly revenues grew by $5.922 billion during the COVID-19 pandemic. Stockrow estimates Tesla’s revenues grew by an astounding 98.11% during the quarter ending on 30 June 2021.
Similarly, Tesla’s quarterly operating income grew from $327 million on 30 June 2020 to $1.312 billion on 30 June 2021. Thus, Tesla’s quarterly operating income grew by $985 million, almost $1 billion during a pandemic.
Tesla Grows and Grows
Moreover, Tesla’s quarterly gross profit grew from $1.267 billion on 30 June 2020 to $2.884 billion on 30 June 2021. Hence, Tesla’s quarterly gross profit grew by $1.617 billion during a pandemic.
Notably, the revenue growth rate at Tesla Motors (TSLA) appears to be a long-term trend. In 2020, Tesla’s revenue growth rate was 31.8% in the quarter ending on 31 March 2020, 39.16% in the quarter ending on 30 September 2020, 45.5% in the quarter ending on 31 December 2021, and 73.58% in the quarter ending on 31 March 2021.
Furthermore, Tesla only experienced one quarter of negative revenue growth during the pandemic. Tesla’s revenues shrank by -4.94% in the quarter ending on 30 June 2020.
Tesla Increases Production
Importantly, that growth comes from the world’s largest auto market: China. Tesla (TSLA) sold 32,968 Chinese-made vehicles in the People’s Republic in July 2021, the China Passenger Car Association estimates. In contrast, Tesla sold 33,155 China-made vehicles in June 2021.
However, Tesla is having problems setting up shop in the world’s third largest auto market, the European Union. The New York Times claims ecological concerns about lizards are delaying construction at Tesla’s Berlin Gigafactory. Environmental groups are suing Tesla over the concerns.
On the other hand, Teslarati claims somebody spotted nine Model Y bodies at Giga Berlin. Teslarati speculates workers will use the bodies to calibrate machines to begin production at the giant factory.
Additionally, Tesla could start Model Y SUV production at its Texas Giga Factory, Teslarati estimates. Tesla will produce the Model Y and its Cybertruck at Giga Texas. Tesla will use its new megacasting technology to build Model Y bodies at the factory near Austin, Electrek claims. In megacasting, Tesla will build structural battery packs into vehicles to increase power and load capacity.
Thus, Tesla is increasing its production in the world’s three largest auto markets. Statista estimates the largest auto markets in 2020 were China with 19.79 million new car registrations in 2020, the United States with 14.46 million new car registrations in 2020, and Europe with 11.96 million new car registrations in 2020.
Consequently, Tesla is experiencing real growth and making more money.
How Much Money is Tesla Making?
Tesla (NASDAQ: TSLA) generates enormous amounts of cash. For example, Tesla reported a quarterly ending cash flow of $17.723 billion on 31 March 2021.
Tesla reported quarterly ending cash flows of $4.898 billion on 30 September 2020 and $5.897 billion on 30 June 2020. Yet Tesla can burn cash. Tesla reported a quarterly ending cash flow of -$898 million on 30 June 2021.
Comparatively, Tesla reported a quarterly operating cash flow of $2.124 billion on 30 June 2021. The quarterly operating cash flow rose from $964 million on 30 June 2020.
Notably, Tesla’s cash and short-term investments grew from $8.818 billion on 30 June 2020 to $16.555 billion on 30 June 2021. Hence, Tesla’s operations generated more cash during the pandemic.
Tesla also paid off debt during the pandemic. Tesla’s total debt fell from $15.163 billion on 30 June 2020 to $11.133 billion on 30 June 2021. Tesla is expanding production, generating more cash, and paying debts. Hence, Tesla is experiencing healthy growth.
What Value Does Tesla Have?
Mr. Market has noticed Tesla’s growth. Notably, Tesla’s share value rose from $324.20 on 13 August 2020 to $717.17 on 13 August 2021. Hence Tesla added $393.14 in share value in a year.
Tesla added other value as well. For example, Tesla’s total assets grew from $38.135 billion on 30 June 2020 to $55.146 billion on 30 June 2021.
Thus, Tesla is a growing company with a high margin of safety. However, I think Mr. Market overprices Tesla (TSLA) at $722.25 a share on 12 August 2021.
In the final analysis, Tesla is an excellent company with a ridiculous share price. Investors need to be careful with Tesla.
Originally published at https://marketmadhouse.com on August 12, 2021.
