Tesla posts profitable first year after sixth straight quarter of gains

Tesla described the past year as a “transformative” year for the electric automaker by reporting its sixth consecutive profitable quarter on Wednesday, leading it to a full year of profitability giving CEO Elon Musk a win-win.

The company generated net income of $ 270 million for the fourth quarter or 0.80 cents per share, slightly below Wall Street estimates of $ 1.03 per share. Revenue topped estimates at $ 10.7 billion as the company delivered 180,667 vehicles in the quarter. For the year as a whole, Tesla reported net profit of $ 721 million on revenue of $ 31.5 billion.

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Going forward, the company has announced ambitious delivery plans.

“Over a multi-year horizon, we expect to achieve an average annual growth of 50% in vehicle deliveries,” Tesla said in a statement. “In some years we will be able to grow faster, which we expect to be in 2021.”

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The average selling price of Tesla vehicles fell 11% year-over-year, as production shifted from Model S and X vehicles to more affordable Model 3 and Y vehicles. Models S and X accounted for 18,966 of total vehicles delivered in the quarter, while Models 3 and Y accounted for 161,701 of total deliveries.

The company previously said it delivered 499,550 vehicles in 2020, just below its estimate of half a million vehicles. It produced 509,737 vehicles during the year.

In addition, the company’s gross margins reached 19.2%, the lowest since the fourth quarter of 2019. The company also reported positive free cash flow for the year of $ 2.79 billion, while that capital spending reached $ 1.15 billion.

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During the quarter, Tesla made a series of upgrades to its facilities.

The Tesla plant in Fremont, Calif. Now includes a new powertrain, an entirely new interior, exterior updates and other upgrades. Production of the new S and X models will resume in the first quarter and return to full capacity over time. Tesla also plans to increase production of the Model Y at the plant, which will include “the integration of one-piece rear underbody moldings to meet customer demand.”

Meanwhile, Tesla’s Gigafactory in Shanghai has increased Model 3 production to over 5,000 cars per week and has started producing its new Model Y vehicles. The company has recently started shipping the new Model 3 vehicles from there. ‘factory to several countries in Europe and the Asia-Pacific region with a “strong response” from customers.

The company also remains “on track to start production of vehicles this year with structural batteries taking advantage of in-house battery technology” at its facilities in Berlin and Austin, Texas, where the company will increase production of the new Models. S and X and will deliver the first Tesla Semi by the end of the year.

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“As our total market share in Europe increased in 2020, Gigafactory Berlin is expected to allow a significant increase in local deliveries, similar to what we saw after the construction of Gigafactory Shanghai,” Tesla said in its letter to shareholders. “The construction of our Berlin plant is continuing as planned.”