Tesla’s earnings report last week showed record growth in profitability and vehicle production and production, despite the volatility of 2021.

A key element for this to happen? Reduced vehicle costs and increased production levels.

The electric vehicle company managed to boost car production to 305,840 in the fourth quarter of 2021, posting 83% growth over the same period last year, according to its earnings reports. On top of that, Tesla has managed to nearly double its automotive business profits from around $7 billion to nearly $14 billion in 2021.

According to Tesla in its earnings report, a significant factor has been lower vehicle production costs. In fact, the average cost to manufacture a Tesla vehicle fell to just $36,000 in the third and fourth quarters of 2021. The figure is noted as COGS (cost of goods sold) in the earnings report, meaning that ‘it only takes into account the direct cost of producing the vehicle and not the cost of sales and marketing, which could add to these expenses.

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In fact, the cost of manufacturing the average Tesla vehicle is well below the list price of even its cheapest model. A base Model 3 sedan costs $40,690, while its top-of-the-line Model S starts at $89,500 and the top-of-the-line Model X SUV costs nearly $100,000.

“Tesla delivered stellar top and bottom results that exceeded expectations across the board with strong tailwinds to EV demand through 2022,” chief executive Daniel Ives told USA TODAY. of Wedbush Securities, a New York-based wealth management, brokerage and advisory firm. in an email.

The results were all the more impressive given the ongoing chip shortages and logistical challenges in the auto industry, Ives points out.

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Production at Tesla’s new Austin factory is also ramping up, leading analysts like Ives to predict even more Tesla growth through 2022. Its 2021 earnings reports show it delivered nearly 940,000 vehicles in 2021, a new record surpassing last year’s sales record of 509,737.

Tesla’s market capitalization, the total dollar market value of the company’s outstanding shares, soared to $1 trillion at the end of October 2021, after car rental company Hertz, which filed for a restraining order. bankruptcy under Chapter 11 at the start of the COVID-19 pandemic, announced plans to buy 100,000 cars from Tesla by the end of 2022 in a pivot to electric vehicles.

Tesla vehicle owners can also take advantage of rebates, which vary from state to state for electric vehicles. On top of that, Biden’s new infrastructure legislation has expanded electric vehicle infrastructure, potentially making Tesla vehicles more attractive to consumers.

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Michelle Shen is a Money & Tech digital reporter for USA TODAY. You can reach her @michelle_shen10 on Twitter.