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Tesla Is Powering Even More Growth

By Brian Withers and Brian Feroldi - May 15, 2021 at 7:31AM

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Is there anything investors should be worried about?

Tesla (TSLA 0.18%) has taken shareholders on a wild ride this past year, but the business just seems to keep powering ahead. On a Fool Live episode recorded on April 28, Fool contributors Brian Feroldi and Brian Withers discuss this electric-vehicle maker's latest stellar results and what investors should be watching.

Brian Feroldi: Ah, OK. I get to do Tesla again in two minutes. Tesla production was up 76% to 180,000 deliveries. Car deliveries were up 110% to 184,000. We knew those numbers going into the quarter though. Solar deployments were up 163% to 92 megawatts, and storage deployments were up 71% to 445 megawatt-hours. If you look at the Supercharger network, that grew 41% to 2,700, and the Model 3 became the best-selling premium sedan, overtaking Audi and BMW. Very impressive.

The company's financials looked really good. Revenue up 74% to $10.4 billion. That was despite average selling price being down 13% because the Model S and the Model X stopped production for the quarter while they are going through their [production] refresh. Regulatory credits were up 46% to $518 million. That definitely helps with profitability and gross margin, but the company is doing well beyond that. Gross profit was up 79% to $2.2 billion, and non-GAAP net income was up 363% to $1.05 billion. Free cash flow was almost $300 million.

The company paid off over $1 billion in debt. It made a more than $1 billion investment in Bitcoin (BTC -1.73%), which is already up big. For this year, the company is focused on growing its factories in Berlin, China, and Texas. The full self-driving is going to be coming relatively soon. That's a big deal because it allows the company to book high-margin revenue and build a new recurring-revenue margin through its subscription offering. For the year, they're predicting more than 50% vehicle growth. This company is doing well.

Brian Withers: Yeah, no kidding, Brian. It just looks like they are executing at a high level in all areas of their business. Is there anything that worries you about this latest report or going forward?

Brian Feroldi: Yeah. If you look beyond, there was an incident that this company had in China with some real negative publicity, especially on social media. There was a consumer that was at the auto show, and she jumped on top of a Tesla, and she was screaming about how her Tesla brakes failed her. It went viral. That's the kind of thing that is really bad for Tesla, because they are making significant investments in China, and China is the No. 1 electric-car market. We've seen plenty of negative headlines hit this company in the past, and so far, none of them have impacted the company. That will be something to watch. But operationally, I think there's a lot to like about this business.

Brian Feroldi owns shares of Tesla. Brian Withers has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Bitcoin and Tesla. The Motley Fool has a disclosure policy.

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