Tesla posts another record quarterly profit—and Wall Street shrugs

A photoshopped image of Elon Musk emerging from an enormous pile of money.
Aurich Lawson / Duncan Hull / Getty

A few years ago, Tesla was still a scrappy startup that sometimes teetered on the edge of bankruptcy. Those days are over. The world’s most valuable car company now has $17 billion in cash in the bank and is currently building its third and fourth car factories—near Berlin and Austin, Texas, respectively.

On Monday, Tesla released its financial results for the first quarter of 2021, and they were the company’s best numbers yet. The electric carmaker reported net earnings of $438 million on a GAAP basis. Revenues were $10.4 billion. That number is down slightly from the fourth quarter’s record figure of $10.7 billion, but it’s up more than 70 percent from a year earlier.

Despite the record profit and near-record revenues, Wall Street wasn’t impressed. Tesla’s stock lost more than 3 percent of its value in morning trading.

Tesla claims the Model 3 has become “the best-selling premium sedan in the world.” And in an investor call Monday afternoon, Elon Musk predicted that the “Model Y will be the best-selling vehicle of any kind in the world, probably next year”—though he admitted he was uncertain about the timing.

On the other hand, Tesla completely halted deliveries of its high-end Model S and Model X vehicles during the first three months of 2021. The shutdown was in preparation for the rollout of the new “Plaid” version of the Model S, which will offer an improved battery, a revamped interior, and other upgrades. Musk said there were “more challenges than expected” in rolling out the new version of the Model S.

Musk expects to resume deliveries of the Model S in May, with a refreshed Model X to come a few months later.

Earlier this year, Tesla revealed that it had purchased $1.5 billion worth of bitcoin. Now Tesla says it has sold 10 percent of its bitcoin holdings, generating a gain of $101 million.

“Elon and I were looking for a place to store cash that wasn’t being immediately used,” Tesla CFO Zach Kirkhorn said on Monday’s investor call. The goal of buying bitcoin was to “get some level of return but also preserve liquidity.” Kirkhorn said bitcoin had served this function well so far.

Tesla’s financial results were also boosted by $518 million in revenue from selling regulatory credits. Some jurisdictions require carmakers to ship a minimum percentage of electric vehicles; companies that fall short buy excess credits from Tesla to comply with these requirements.