Tesla earns a net income of $1.62 billion during the q3 of 2021 amidst the growing chip shortage in the country.

On Thursday, Oct 21, Tesla’s net income revealed that the company had grown 54 percent in the last quarter as its net earnings reached almost a 1.6$billion.

In a recent statement, the company stated, “Operating income increased substantially year-on-year (YoY) mainly due to vehicle volume growth and cost reduction.”

It further added that “Positive impacts were partially offset by ASP decline, growth in operating expenses, lower regulatory credit revenue, additional supply chain costs, Bitcoin-related impairment of $51 million and other items.”

The company revealed, the last quarter it has sold 238,000 vehicles and delivered around 240,000. The q3 sales were mostly driven by its Model Y and Model 3 vehicles due to their high affordability. Precisely, the overall quarterly delivery of Model 3 and Model Y reached 232,000.

On Wednesday, the company said that the prices of their vehicle decreased by 6 percent “due to continued mix shift towards lower-priced vehicles over the last year.”

Yet, Tesla’s operating margin grew to 14.6 percent as compared to 11 percent in the 2nd quarter and 9.2 percent last year.

In a letter to the shareholders, Tesla said, “Our operating margin reached an all-time high as we continue to reduce cost at a higher rate than declines in ASP,”

Tesla achieved a surge in sale percentage by 28.8 percent in the q3 primarily due to its electric vehicle as compared to the 2nd quarter, which was 25.8 percent.

In another story, the q3 saw Tesla booking a bitcoin-related impairment worth $51M, for which the company must report in case of impairment loss. The company faced the second negative impact on profits due to impairment loss for the year. However, it generated a $101M positive impact in the first quarter of 2021.

Tesla‘s unexpected q3 sales, which were 70 percent more than the previous year, stood in stark contrast to the other automaker giants that saw a disappointing dip in sales. 

General Motors reported a gross sales of 446,997 vehicles in q3, representing a drop of 32.8 percent from the previous year due to chip shortages and production disruptions.

Meanwhile, American Honda sales saw a dip of 10.9 percent, even worse than the 6.7 percent that the analysts were expecting.

Even though Tesla saw a rise in sales, the company struggled with global supply chain issues due to chip shortages and delivery and manufacturing disruptions in the q3.

In a letter to shareholders, the company also explained, “A variety of challenges, including semiconductor shortages, congestion at ports and rolling blackouts, have been impacting our ability to keep factories running at full speed.” the company added, “We believe our supply chain, engineering and production teams have been dealing with these global challenges with ingenuity, agility, and flexibility that is unparalleled in the automotive industry.”