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Tesla Q1 Earnings: What You Need to Know

Electric-car maker Tesla (NASDAQ: TSLA) continued to grow rapidly in Q1. The company's total revenue surged 74% year over year, fueled by a 109% year-over-year increase in vehicle deliveries. Net income also rose to a record high, although it was aided by the sale of regulatory credits.

Here's a closer look at the quarter.

Image source: Tesla.

Undeniable momentum

A look at Tesla's operating metrics and financials shows a growth stock in its purest form. In addition to its skyrocketing vehicle deliveries and revenue, vehicle production, megawatts of solar deployments, and megawatt-hours of energy storage installations all soared 76%, 163%, and 71% year over year, respectively, in Q1.

Breaking down its vehicle deliveries by model, Tesla's lower-cost Model 3 and Y deliveries increased 140% year over year on a combined basis to 182,338. Its flagship Model S and X vehicles, however, declined 83% year over year to just 2,030 as Tesla paused production of the two vehicles as part of its move to start making new and redesigned versions of the models.

Tesla achieved record production and deliveries despite "multiple challenges, including seasonality, supply chain instability and the transition to the new Model S and Model X," it explained in its first-quarter update.

Tesla's net income was $438 million for the quarter. Though that was helped by $518 million in sales of regulatory credits. However, if you were to exclude the $299 million stock-based compensation awarded to CEO Elon Musk during the quarter for the achievement of a market capitalization and operational milestone, Tesla would have been profitable even without regulatory credits.

What Tesla is saying

The company's first-quarter update was packed with optimism, including management explaining how Model 3 is the best-selling premium sedan in the world and noting that production and factory construction continue to progress well.

The Model 3 is now "outselling longtime industry leaders such as the 3 Series and E-Class," Tesla said. "This demonstrates that an electric vehicle can be a category leader and outsell its gas-powered counterparts. We believe Model Y can become not just a category leader, but also the best-selling vehicle of any kind globally."

Tesla also noted that its Model Y production rate at its factories in Shanghai and California is improving. On a similar note, management said construction of its factories in Berlin and Texas is on track for vehicle production and deliveries from the factories to start late this year.

Looking ahead, Tesla reaffirmed its view for total deliveries this year to increase more than 50% year over year in 2021. In addition, management once again said that it believes it has sufficient liquidity to fund its expansion plans from internally generated funds.

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