Here's Why Tesla Is So Profitable
Over the past several years, Tesla (NASDAQ: TSLA) has posted massive profit growth. As recently as 2019, the electric vehicle pioneer was unprofitable under generally accepted accounting principles (GAAP) and barely breaking even on an adjusted basis. However, Tesla's operating margin improved to 6.3% in 2020 and 12.1% in 2021, reaching nearly 15% in the second half of last year.
There's a simple reason why Tesla has suddenly leapt toward the top of the auto industry in terms of profitability: the company is selling huge numbers of vehicles built on a single platform at high prices. Yet this fact isn't widely acknowledged as the source of Tesla's improved fortunes. Let's take a look at what this means for Tesla moving forward.
Tesla delivered over 936,000 vehicles in 2021: up 155% from the 367,656 vehicles it delivered two years earlier. The Model 3 sedan and Model Y crossover, which are built on the same platform, accounted for 97% of Tesla's output last year. Deliveries of the Model S and Model X fell to 24,980 (from a peak of over 100,000 a few years ago), due to a long production shutdown.
Source Fool.com
