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Tesla Earned $18.76 Billion in Q1 and Achieved Record Margins

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Tesla has just announced that both the top line and bottom line of its first-quarter earnings for 2022 exceeded analysts’ expectations. Take a look at the important numbers.

  • Earnings per share: $3.22 compared to the expected $2.26
  • Revenue: $18.76 billion compared to $17.80 billion expected

The company’s shares jumped as much as 6% in after-hours trading.

Its automotive revenue for this period reached $16.86 billion, an increase of 87% compared to that of the previous year. According to a report from Tesla, the main segment of the company achieved gross profit of $5.54 billion, a record gross margin for the automotive industry. In the third quarter, automotive revenues reached $679 million as a result of regulatory credits.

In its shareholder deck, Tesla states that the company’s revenue growth is due in part to the increase in the number of cars it delivered and the increase in average sales prices.

Tesla reported earlier this month that it delivered 310,048 vehicles to its customer during the first quarter, which is a close approximation to its sales. During the period ending March 31, 2022, 99.5%, or 295,324, of all deliveries were Model 3 and Model Y models.

According to the company’s earnings call, Alon Musk and Zachary Kirkhorn, the company’s CFO, stated that they remain confident that Tesla can grow at least 50% over the previous year’s numbers. On the other hand, the execs noted that the company has lost around a month of construction volume in Shanghai as a consequence of shut-downs associated with Covid.

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According to Kirkhorn, production has resumed at a limited level, and the company is working hard to return to full production as soon as possible.

Musk maintained that despite the slowdown, it appears likely that one and a half million cars will be produced this year. However, Musk warned that customers who order now will face an extremely long waitlist, and that some of their orders won’t arrive until next year.

It is also recognized by Musk that the development of autonomous driving is taking longer than expected.

According to Volker, “For any technology development that I have ever been involved with, in terms of self-driving I don’t think that I have seen more false dawns where we seem to be breaking through but then don’t.” He therefore encouraged people to join Tesla’s FSD Beta program, which requires owners to purchase the company’s FSD premium driver assistance package, which is part of the Autopilot feature, then earn a high safety rating. Tesla vehicles are not fully autonomous when equipped with FSD, which costs $12,000 upfront or $199 a month.

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In early April, Musk said the company would be working on a new “futuristic” robotaxi, but he took no further details about it. Tesla is preparing to hold an event on its robotaxi next year, and is “aiming for volume production at some point in 2024.”

Compared to the same period last year, Tesla’s solar deployments declined by nearly half to 48 MW in the first quarter of 2022 compared to the same period last year. A total of 846 MWh of lithium-ion battery-based energy storage systems were installed by the company in the past quarter, which was an increase of 90% compared to the same time last year, but a decrease over the previous quarter.

In a statement Tesla explained that the decline in solar installations was the result of import delays on certain components that were beyond its control.

Tesla’s global vehicle inventory dwindled to a three-day supply of vehicles in the first quarter of 2022 as the company struggled to deal with a combination of inflationary pressures and parts and semiconductor chip shortages exacerbated by the ongoing pandemic and the brutal Russian invasion of Ukraine. It is the first time that global vehicle inventories have been below four days as opposed to eight days during the first quarter of 2021, when they reached eight days.

The company stated in its shareholder presentation that its own factories have been running at less than full capacity for several quarters. It did not provide any further details on its plan for deliveries going forward, except to say it expects to see 50% annual growth on a multi-year basis, and that supply constraints are likely to continue until 2022. According to Musk, this year’s inflation will be worse than reported, and it will likely continue through the remainder of the year.

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