For the third quarter of 2021, Tesla reported best net income, operating profit and gross profit. Additionally, it achieved an operating margin of 14.6%, exceeding its medium-term guidance.
This was accomplished while Tesla ASP (averaged selling price) decreased by 6% YoY in Q3 due to a continued shift in the mix towards lower-priced vehicles. Its operating margin reached an all-time high as Tesla reduced cost at a higher rate than the declines in ASP.
Further, Tesla, like other automakers, had to contend with semiconductor shortages, congestion at ports and rolling blackouts.
The strong results came after Tesla delivered 73% more vehicles year-on year—241,391 units in Q3 2021, compared to 139,593 units in Q3 2020. (Earlier post.)
For Q3 2021:
Total revenue grew 57% YoY to $13.757 billion, primarily through growth in vehicle deliveries.
Operating income improved to $2.0 billion in Q3 compared to $809 million in the same period last year, resulting in a 14.6% operating margin. This profit level was reached while incurring SBC expense attributable to the 2018 CEO award of $190 million in Q3, primarily driven by a new operational milestone becoming probable.
Quarter-end cash and cash equivalents decreased to $16.1 billion in Q3, driven mainly by net debt and finance lease repayments of $1.5 billion, partially offset by free cash flow of $1.3 billion. Total debt excluding vehicle and energy product financing has fallen to $2.1 billion at the end of Q3.