Tesla described the past year as a "transformative" one for the electric automaker as it reported its sixth straight profitable quarter on Wednesday driving it to a full year of profitability giving CEO Elon Musk a win-win.
The company generated $270 million in net income for the fourth quarter or $0.80 cents per share, slightly below Wall Street's estimates of $1.03 per share. Revenue came in ahead of estimates at $10.7 billion as the company delivered 180,667 vehicles in the quarter. For the full year, Tesla posted $721 million in net income on revenue of $31.5 billion.
Looking ahead, the company announced ambitious delivery plans.
“Over a multi-year horizon, we expect to achieve 50% average annual growth in vehicle deliveries,” Tesla said in a statement. "In some years we may grow faster, which we expect to be the case in 2021."
The average selling price for Tesla vehicles declined by 11 percent year-over-year as production shifted from the Model S and X vehicles to the more affordable Model 3 and Y vehicles. The Model S and X accounted for 18,966 of the total vehicles delivered in the quarter while the Model 3 and Y accounted for 161,701 of the total deliveries.
The company previously said it delivered 499,550 vehicles in 2020, falling slightly short of its half a million vehicle delivery estimate. It produced 509,737 vehicles during the year.
In addition, the company's gross margins reached 19.2 percent, the lowest since the fourth quarter of 2019. The company also reported positive free cash flow for the year of $2.79 billion while capital expenditures hit $1.15 billion.
During the quarter, Tesla made a series of upgrades to its facilities.
Tesla's Fremont, California factory now includes a new powertrain, an entirely new interior, exterior updates and other improvements. Production on new Model S and X vehicles will resume in the first quarter and ramp back up to full capacity over time. Tesla also plans to increase Model Y production at the facility, which will include "integration of single-piece rear body underbody castings to meet customer demand."
Meanwhile, Tesla's Gigafactory in Shanghai ramped up Model 3 production to more than 5,000 cars per week and began producing its newer Model Y vehicles. The company recently started shipping the new Model 3 vehicles from the factory to several countries in Europe and the Asia Pacific region with a "strong response" from customers.
The company also remains “on track to start vehicle production this year with structural batteries leveraging in-house battery technology” at its Berlin and Austin, Texas facilities, where the company will ramp up production of the new Model S and X and deliver the first Tesla Semi by the end of the year.
“While our total market share in Europe increased in 2020, Gigafactory Berlin should enable a significant increase in local deliveries, similar to what we saw after constructing Gigafactory Shanghai,” Tesla said in its shareholder letter. “Buildout of our Berlin factory continues as planned.”