Gary Zhou 
Tesla’s (NASDAQ:TSLA) second-quarter for 2021 saw the electric car maker post $11.958 billion in revenue. The results, which were discussed in the Q2 2021 Update Letter, were released after the closing bell on Monday, July 26.
Tesla’s second-quarter was impressive, with the electric car maker producing a total of 206,421 vehicles, an astounding number considering that Q2 was beset by a number of headwinds. The company also delivered 201,250 vehicles comprised of 199,360 Model 3 and Model Y, as well as 1,890 Model S.
Tesla’s strong Q2 results were due in part to the Model Y’s accelerating ramp in the United States and the all-electric crossover’s momentum in China. Tesla also finally started deliveries of the new Model S Plaid and Model S Long Range, which are high-margin vehicles.
The following are the key points in Tesla’s Q2 2021 Update Letter.
REVENUE
Tesla beat expectations in Q2 2021, reporting a revenue of $11.958 billion for the second quarter, representing total revenue growth of 98% year-over-year. In comparison, Wall Street expected Tesla’s Q2 2021 revenue to be at $11.299 billion, with the highest estimates pointing to revenue of $12.827 billion and the lowest estimates pointing to $9.5 billion of revenue.
EARNINGS
Tesla also beat expectations for earnings, with the company posting earnings per share of $1.45 in the first quarter. Wall Street, on the other hand, expected Tesla to report a gain of $0.98 per share.
PROFITABILITY
Tesla posted a GAAP operating income of $1.3 billion in the second quarter, with an 11.0% operating margin in Q2 2021. The company also posted $1.1 billion of GAAP net income and $1.6 billion of non-GAAP net income. GAAP automotive gross margin also stood at an impressive 28.4%. This was the first time that Tesla exceeded $1 billion of GAAP net income in its history.
CASH
Tesla had an operating cash flow less CapEx (free cash flow) of $619 million in the second quarter. The company also saw a decrease of $912 million in its cash and cash equivalents, resulting in its war chest now standing at $16.2 billion as of Q2 2021.
GIGAFACTORIES
Tesla has provided some updates on the company’s multiple Gigafactories that are under construction. According to Tesla, commissioning has already started in some areas of Gigafactory Texas. Gigafactory Shanghai has completed its transition as Tesla’s primary vehicle export hub as well. Over in Europe, Tesla is focusing on growing import volumes to the region as Giga Berlin continues its equipment tests.
4680 CELLS
Tesla’s Q2 2021 Update has provided a number of key updates about the development of the company’s 4680 cells. For one, the company has successfully validated performance and lifetime of its 4680 cells. Manufacturing validation of the 4680 cell production lines at the Kato Road facility are nearing their end as well. Last but not least, internal crash tests of 4680 structural battery packs have so far been successful.
TESLA ENERGY
Tesla Energy hit its stride in the second quarter, with battery storage deployments tripling in Q2 2021. This increase was primarily due to several Megapack projects. The company noted, however, that while Powerwall demand is exceptional, supply chain challenges have kept the home battery system backlogged. As for the Solar Roof, deployments reached 85 MW in the second quarter, more than tripling year-over-year.
Tesla’s Q2 2021 Update Letter could be accessed here.
