After an incredible 2020 for Tesla (NASDAQ: TSLA) inventory, expectations were high in the fourth-quarter earnings report Wednesday afternoon. Investors in the growth stock were looking for another quarter of significant gains and signs that rapid growth in sales could continue in 2021 and beyond.
The carmaker probably delivered. Free cash flow has risen, management has led to the delivery of vehicles in 2021 growing even faster than in 2020, and the company has unveiled a brand new Model S interior.
“The past year has been transformative for Tesla,” management said in updating the company over the fourth quarter. “Despite unforeseen global challenges, we have surpassed many trends seen elsewhere in the industry as our volumes, profitability and cash generation have increased significantly.”
New Tesla Model S interior. Image source: Tesla.
Here are five of the most important benchmarks from the quarter up close.
1. Revenue growth of 46%
Tesla, fueled primarily by a 61% year-on-year increase in vehicle deliveries, boosted Tesla’s revenue by 46% in the fourth quarter, giving the company a strong year. This puts annual revenue at $ 31.5 billion, compared to $ 24.6 billion in 2019.
2. Free cash flow of $ 1.9 billion
Tesla’s free cash flow (cash through operations minus capital expenditure) was $ 1.9 billion, compared to $ 1 billion in the previous year. Management has’ sufficient ‘liquidity’ to finance its’ product card, long-term capacity expansion plans and other expenses’.
Installed energy storage capacity of 1,584 megawatts-hours
Tesla’s energy storage business has grown strongly recently – and Q4 was no exception. Quarterly energy storage facilities amounted to 1,584 megawatts per hour, compared to 530 megawatts per hour in the previous quarter. The total 2020 megawatt-hour energy storage activity was more than 3 gigawatt-hours, which increased by 83%.
4. An operating margin of 5.4%
Tesla’s fourth-quarter operating margin of 5.4% set its total operating margin of 2020 at 6.3%, up from 0.3% in 2019. Management said its operating margin will continue to expand and eventually a will reach leading level.
5. An expected increase in vehicle deliveries of more than 50%
Tesla’s year-on-year growth of 36% in vehicle deliveries in 2020 was impressive. However, according to management’s forecast, 2021 will be even more remarkable. In the fourth quarter update, Tesla said vehicle delivery would increase by more than 50% year-on-year. This will bring the total 2021 deliveries to more than 750 000 – compared to about 500 000 deliveries in 2020.
As if these standards are not enough to get excited for Tesla shareholders, Tesla has also reiterated some important progress with its product plans. These include the start of production of Model Y at its factories in Berlin and Texas, and the launch of Tesla Semi – both this year – along with a brand new interior design for Tesla’s Model S sedan.