SAN FRANCISCO, April 20 – Tesla Inc (TSLA.O) results on Wednesday beat Wall Street expectations as higher prices helped shield the electric vehicle maker from supply chain chaos and rising costs.
The results should also trigger new payouts of $23 billion to CEO Elon Musk, who is already the richest man on earth.
Tesla has been an outlier since the pandemic broke, posting record deliveries and profits for several quarters as rivals grappling with the snarl of the global supply chain instituted production halts.
Shares of Tesla were up 5% after the close.
On an investor conference call, Musk said Tesla has a reasonable chance of achieving 60% vehicle shipment growth this year and remains confident of posting 50% annual vehicle shipment growth for several years.
Tesla raised prices in China, the United States and elsewhere after Musk said in March that the US electric carmaker faced significant inflationary pressures in commodities and logistics amid the crisis in Ukraine.
“Our own factories have been running below capacity for several quarters as the supply chain became the main constraining factor, which is likely to continue through the end of 2022,” Tesla said in a statement.
The price hikes are intended to cover higher costs for the next six to 12 months, protecting Tesla from orders for cars it might not deliver for a year.
“Price increases far exceed cost inflation,” said Craig Irwin of Roth Capital.
“Chinese manufacturing issues appear to be well managed, and we expect Austin and Berlin to pick up the slack from Shanghai’s 19-day outage,” he said, referring to Tesla’s two new factories in Texas and Germany, which are located in started shipping in the last few months
The results saw Musk achieve a hat-trick of performance goals totaling $23 billion in new compensation. He doesn’t receive a salary, and his salary package requires Tesla’s market cap and financial growth to meet a series of escalating goals. Continue reading
Revenue for the world’s most valuable automaker was $18.8 billion for the first quarter ended March 31, versus estimates of $17.8 billion, according to IBES data from Refinitiv. That is 81% more than in the previous year.
Revenue from the sale of its regulatory loans to other automakers rose 31% year over year to $679 million in the first quarter, which helped boost revenue and profits.
Earnings per share were $3.22, beating analyst estimates of $2.26.
Model Y cars are pictured during the opening ceremony of the new Tesla Gigafactory for electric cars in Gruenheide, Germany, March 22, 2022. Patrick Pleul/Pool via REUTERS
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Tesla’s pre-tax earnings (EBITDA) per vehicle delivered rose more than 60% year over year to $16,203 last quarter.
Tesla said it lost about a month of construction volume from its Shanghai factory due to COVID-related shutdowns. Production will resume at a limited level, which will impact overall build and shipment volume in the second quarter.
Musk expects Tesla’s overall production in the current quarter to be similar to the first quarter.
Price development, profit and sales of Tesla
LITHIUM IS SOFTWARE
Musk says lithium is driving costs up and is “a limiting factor” in EV growth.
He encouraged companies to get into the lithium business, which he said would generate high margins thanks to high prices.
“Lithium margins are practically software margins right now… Do you like to mint money? Well, the lithium business is for you.”
He also said that Tesla will be making “some exciting announcements in the coming months” regarding battery raw material securing.
Musk said his own 4680 battery cells would become a risk to production next year if they don’t resolve mass production by early 2023. “But we’re very confident in doing so.” He also said it will also use its existing 2170 batteries on vehicles, which are made in Texas, to mitigate risk.
Musk said Tesla expects to mass-produce a robotaxi with no steering wheel or pedal by 2024.
During the call, Musk did not mention Twitter (TWTR.N), which he offered for sale for $43 billion last week. Investors worry he may sell some Tesla stock or borrow additional Tesla stock to fund his bid.
Investors also fear Musk will be sidetracked from his Twitter bid while Tesla ramps up production at new factories in Berlin and Texas.
“Factory ramps take time, and Gigafactory Austin and Gigafactory Berlin-Brandenburg will be no different,” Tesla said in a statement.
The new factories will be key to meeting demand and reducing reliance on its China factory, its largest recovering from a plant closure. Continue reading
Reporting by Hyunjoo Jin in San Francisco and Akash Sriram in Bengaluru and Joe White in Detroit; Edited by Peter Henderson and Lisa Shumaker