Tesla Made More In Profit Than GM In Q2 Despite Selling Fewer Vehicles

The leading electric vehicle company posted second-quarter results recently that saw revenue miss analysts’ estimates. Despite that, Tesla Inc TSLA posted operating margins which were once again among the best in the automotive industry.

What Happened: Tesla reported vehicle deliveries of 254,695 in the second quarter, up 27% year-over-year.

The total from the electric vehicle leader trailed the second quarter total of General Motors Company GM, which reported 1,421,000 vehicles delivered in the quarter, down 19.1% year-over-year.

Despite Tesla’s total vehicles delivered in the quarter being around 18% of the total posted by General Motors, Tesla beat the legacy automaker on one very important front.

Tesla posted a net income of $2.62 billion, up 62% year-over-year.

General Motors' net income in the second quarter was $1.69 billion, down 40% year-over-year.

Tesla’s operating margins of 14.6% were among the highest in the sector in the second quarter. Coincidentally, Tesla’s operating margins were 19.2% and 14.7% in the first quarter 2022 and fourth quarter 2021, respectively.

Related Link: 4 General Motors Analysts React To Q2 Earnings Miss, Ongoing Supply Chain Challenges 

Why It’s Important: Tesla is the market leader in electric vehicles and has established a dominant head start in the space.

While legacy automakers such as General Motors have plans in place to take Tesla head-on and take market share away from them, it will likely come with lower margins than Tesla has.

Tesla’s vertical integration and careful manufacturing growth over the years have paid off for the company’s bottom line and for shareholders along the way.

Tesla is seeing strong demand and had its Model 3 rank as the ninth bestselling car worldwide in 2021. The Model 3 and Model Y could both rank among the 10 bestselling vehicles in 2022. General Motors had no cars rank in the top 10 in 2021.

TSLA, GM Price Action: Tesla shares are down 0.43% to $839.08 Friday morning versus a 52-week range of $620.57 to $1,208. Tesla shares are down 29.8% year-to-date in 2022.

General Motors shares are down 0.28% to $35.63 Friday morning versus a 52-week range of $30.33 to $67.21. General Motors shares are down 41.7% year-to-date in 2022.

Photo: Nadezda Murmakova via Shutterstock