This has erased questions about the automaker's long-term viability that came up in its early years when Tesla faced production difficulties and losses. As a result, Tesla has cemented its position as the leader in the electric vehicle (EV) market.

However, Tesla's success could still be impacted by the current shortage of chips that have become critical components in modern vehicles. Other major automakers have had to halt production, but Tesla has been able to secure an adequate supply of chips for some time.

Here is a breakdown of Tesla’s earnings in Q2 and factors that spurred the company’s growth.

Tesla sees huge earnings in the second quarter of this year.

Tesla's 2020 vs. 2021 Q2 earnings

Currently, the demand for electric vehicles is surging. The expectation is that this shift will make the automaker more profitable going forward. In the April-June period, Tesla earned $1.14 billion in net income, according to

CNBC

This is 10X the amount in profits compared to the same period in 2020. Tesla’s total revenue in the second quarter of 2021 was about $12 billion, nearly double the amount the brand earned last year.

Tesla’s overall automotive revenue reached $10.2 billion, with $354 million coming from regulatory credits sales. This amount for credits is 17% lower than the first quarter and the lowest out of the previous four quarters. However, the company's gross margin surged to 28.4%, which is a historic high for the metric.

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Reasons behind Tesla's tenfold growth

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As mentioned earlier, the automotive sector's future is EVs, and that is why manufacturers are shifting away from gasoline-powered vehicles. Since Tesla is a leader in this segment, the expectation is that the rising demand for EVs will push the brand's profits higher. In Q2, Tesla set new records in deliveries, the closest approximation of sales.

The brand produced 206,421 vehicles between April and June, and sold 201,250 EVs, according to CNBC. In Q1, 184,800 Tesla Model 3 and Model Y vehicles were delivered, which drove that period's surge in sales. The Model S and Model X contributed to record sales in Q2.

Tesla's future plans

The automaker is optimistic that the company will grow even faster in the upcoming months. Tesla hopes to sell 750,000 vehicles in 2021 to meet its 50% growth target.

Since the Model S and Model X are back in the mix, that goal doesn’t seem far off, as reported by

BBC News

. The Gigafactories in Texas and Germany are expected to be ready in 2021 which will help Tesla reach its targets. Tesla also indicated that it had validated the lifetime and performance of its 4680 cells produced at the Kato facility in California.

Currently, the automaker is focused on improving the manufacturing processes to increase production. If all goes as planned, Tesla will see the upward trend of sales continue in Q3 and Q4.

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