Tesla is starting to motor as profits roll in

Sales at electric-car maker Tesla reached almost $12bn in the second quarter of 2021, nearly double the level of a year ago.

Tesla is roaring ahead, says Lex in the Financial Times. Sales reached almost $12bn in the second quarter, nearly double the level of a year ago, while operating profits tripled to $1.3bn. Tesla “benefited from higher sales volumes and reined in its operating costs”. Tesla also seems optimistic about the future, as it has already announced “robust” deliveries of new vehicles for the second quarter, despite supply-chain problems.

The latest figures suggest that Tesla “has finally joined the grown-ups”, says Antony Currie on Breakingviews. Its pre-tax profit margin of 11% rivals Toyota and General Motors (GM). Still, this doesn’t mean the shares are worth buying. They look wildly overvalued at 115 times forward earnings. Meanwhile, the group is facing growing competition from both “established manufacturers”, such as Volkswagen, Ford Motor and GM, and “young start-ups” such as Lucid. Tesla may have avoided the fate of other electric carmakers, such as Faraday Future, Fisker Automotive and Lordstown Motors, which either went bankrupt or failed to break through, but even CEO Elon Musk accepts that Tesla’s future may not be as rosy as its past, says Io Dodds in The Daily Telegraph. 

He warned against complacency, cautioning that “the seeds of defeat are sown on the day of victory”. In particular, he admitted that Tesla was vulnerable to further supply-chain pressures, while Tesla continues to experience “repeated turbulence” in China due to a series of protests by consumers about “alleged safety errors”.

Recommended

What will happen to the price of gold in 2022?
Gold

What will happen to the price of gold in 2022?

Gold is traditionally the go-to asset during inflation. But with inflation at 30-year highs, it has gone nowhere. Dominic Frisby investigates why, and…
20 Jan 2022
UK inflation is at a 30-year high and it hasn’t peaked yet
Inflation

UK inflation is at a 30-year high and it hasn’t peaked yet

UK inflation has hit 5.4% - its highest in 30 years. And it could be heading higher. John Stepek explains what it means for you and your money.
19 Jan 2022
Index fund
Funds

Index fund

Index funds (also known as passive funds or "trackers") aim to track the performance of a particular index, such as the FTSE 100 or S&P 500.
18 Jan 2022
Model Y: Tesla has nailed it once again
Cars

Model Y: Tesla has nailed it once again

The electric carmaker’s new SUV crossover, the Model Y, sets the benchmark in the sector.
18 Jan 2022

Most Popular

Five unexpected events that could shock the markets in 2022
Stockmarkets

Five unexpected events that could shock the markets in 2022

Forget Covid-19 – it’s the unexpected twists that will rattle markets in 2022, says Matthew Lynn. Here are five possibilities
31 Dec 2021
US inflation is at its highest since 1982. Why aren’t markets panicking?
Inflation

US inflation is at its highest since 1982. Why aren’t markets panicking?

US inflation is at 7% – the last time it was this high interest rates were at 14%. But instead of panicking, markets just shrugged. John Stepek explai…
13 Jan 2022
Tech stocks teeter as US Treasury bond yields rise
Tech stocks

Tech stocks teeter as US Treasury bond yields rise

The realisation that central banks are about to tighten their monetary policies caused a sell-off in the tech-heavy Nasdaq stock index and the biggest…
14 Jan 2022