Tesla releases its eye-watering annual profits after ‘breakthrough year’

Elon Musk’s brain child didn’t make him any money for the first 16 years but now Tesla is breaking records with its incredible profits.

Elon Musk’s brain child didn’t make him any money for the first 16 years but now Tesla is breaking records for its incredible profits.

Electric vehicle company Tesla has made a record amount of money in the past year, increasing its profits six-fold in the space of 12 months and surpassing all expectations.

On Wednesday local time (Thursday Australian time), Tesla posted its annual profits and despite admitting to feeling the impact of global supply chain issues on its production line, it was still the company’s best ever year.

The car corporation made a whopping US$5.5 billion in profit in 2021 compared to US$721 million the year before.

Its sales rose by 71 per cent in a year, going from $31.5 billion to $53.8 billion.

The final quarter of last year was particularly strong, with revenue at US$17.72 billion in the last three months of 2021, up considerably from US$10.74 billion during the same period of time in 2020.

This is only the third year in a row that Tesla turned a profit, after its creation 19 years ago.

CEO Elon Musk said 2021 had been a “breakthrough year” and that he believed Tesla had finally become a “real company”.

Elon Musk’s company Tesla Inc has made US$5.5 billion in profit, the best turnover in the company’s 19-year-history. Picture: Frederic J Brown/AFP

During the conference with investors on Wednesday evening local time, Mr Musk reportedly said: “In 2021, our accumulated profitability since the inception of the company became positive which I think makes us a real company at this point.

“This is a critical milestone.”

The sheer enormity of Tesla’s operations is largely behind the significant jump in profits.

Tesla created and dispatched more than 936,000 vehicles globally last year, an increase of 87 per cent compared to 2020.

The company said it started building Model Y vehicles in late 2021 at its factory in Austin, Texas, and plans to start deliveries of the compact SUV after final certifications.

It cited “record production” at its San Francisco factory as one major contributor to its profit, and is expecting to increase capacity beyond 600,000 vehicles a year.

Tesla released its annual results on Thursday morning Australian time. Picture: John Thys/AFP

The staggering numbers defied all expectations, beating predictions from market analysts and Wall Street estimates.

Experts expected Tesla to finish the fourth quarter on US$2.36 per share with a revenue of US$16.64 billion.

Instead, investors were pleasantly surprised, with the final number being US$2.54 per share with a turnover of US$17.72 billion in those three months.

Mr Musk’s company didn’t turn a profit for the first 16 years of its existence. Picture: Tobias Schwarz / AFP

Tesla expects supply chain issues to stick around for 2022 but there’s no telling how well the company will perform once it can reach capacity.

“Our own factories have been running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through 2022,” Tesla said in a statement.

Tesla also said that rising raw-materials prices and higher logistics costs dented profit, as did increased costs related to vehicle recalls.

Tesla “has become masterful at underpromising and overdelivering and has now beat in nine of the past 10 quarters,” Garrett Nelson, an analyst from New York-based market research company CFRA, said in a note.