U.S. electric car manufacturer Tesla increased its net profit by 17 percent to $477 million in the first quarter, driven by higher car sales. The company also confirmed plans for massive additional investments in autonomous transportation, humanoid robots, and artificial intelligence (AI). It announced this in a press release on Wednesday.
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Tesla back on track
The results exceeded analysts’ expectations. Last year, the automaker’s results were weaker because Tesla faced boycotts due to CEO Elon Musk’s involvement in the Donald Trump administration’s initiative aimed at reducing government spending. Musk is the richest person in the world, and although he left the White House initiative last spring, he continues to speak publicly on political issues.
Revenue in the first quarter rose 16 percent to $22.4 billion. Global sales increased 6.3 percent year-over-year to 358,023 vehicles, after falling 13 percent in the same period last year. Tesla added that it is seeing continued growth in Asia and South America and is observing a recovery in demand in the region comprising Europe, the Middle East, and Africa. It is also seeing improvement in North America.
The European Automobile Manufacturers’ Association (ACEA) reported today that Tesla has returned to growth in the EU following last year’s decline. For the entire first quarter, the number of new Tesla registrations increased by 59.6 percent year-over-year to 57,792 vehicles. Of that total, Tesla doubled its car sales in the EU in March alone.
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Tesla bets big on the future
Musk stated that the automaker will continue to make massive investments, calling them essential for Tesla’s future and promising massive profit growth. CFO Vaibhav Taneja added that the automaker is embarking on a very extensive investment phase, which is starting right now and will last several years. It plans to spend more than $25 billion this year; as recently as January, Tesla had projected $20 billion in investments for this year.
Analysts also viewed the 51 percent increase in subscribers to the Full Self-Driving (FSD) program to 1.28 million as positive. The service is available for $99 per month. Musk hopes the service will be operational in more than ten U.S. states by the end of this year. He expects the project to be significantly beneficial next year.
However, the automaker was cautious in releasing its production volume estimate and provided little information on what total production volume it expects. In its outlook, it stated that volumes will be influenced by overall demand for products as well as the readiness of the supply chain. It avoided providing specific figures on profits and other metrics. Musk also avoided making specific promises regarding the Optimus humanoids. Tesla plans to set up its first factory for the production of humanoid robots in the second quarter, AFP reported.
Source: Reuters
