Tesla reports record sales and beats profits


Electric vehicle maker Tesla reported profit after the bell, beating both earnings and sales. Shares are up more than 4% after hours. Here are the results.

  • Revenue (adjusted): $1.19 versus $1.13 per expected share, per Refinitiv
  • Gain: $24.32 billion versus $24.16 billion expected, according to Refinitiv

In the same quarter last year, Tesla reported revenue of $17.72 billion and adjusted earnings of $2.52 per share ($0.85 adjusted for an August 2022 stock split).

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Tesla reported fourth-quarter auto sales of $21.3 billion, a 33% year-over-year growth. $467 million of that came from regulatory appropriations in the fourth quarter of 2022, up nearly half from the prior year in the same period.

Gross margins in the auto industry were 25.9%, the lowest in the past five quarters. Operating cash flow was 29% lower than last year and 36% lower than last quarter, totaling $3.28 billion.

In a shareholder meeting, the company acknowledged that average sales prices “have generally been on a downward trajectory for many years,” and said “affordability” would be necessary for Tesla to grow into a multi-million-vehicle sales company annually.

At the end of 2022 and this year, Tesla lowered the prices of its cars around the world, upsetting customers in the US and China who recently bought new Teslas at higher prices, and an immediate drop in used car prices in the US as well. Tesla caused.

However, the price cuts seem to have boosted demand. Speaking to shareholders and analysts on Wednesday, CEO Elon Musk said, “So far in January, we’ve seen the strongest orders yet in our history. We’re currently seeing orders nearly double production.”

Tesla’s Shanghai plant has also been intermittently closed, and Musk has not specified exact production rates for the first few weeks of January.

The company has not issued any new guidance, but reiterated in its earnings release: “We plan to grow production as quickly as possible in line with the 50% compound annual growth target we started to follow in early 2021.”

Musk also answered an analyst’s question about his purchase of Twitter by promoting the social media service as a great way to connect with customers.

“I have 127 million followers. And it continues to grow rapidly. That suggests I am quite popular. I may not be popular with some people. But for the vast majority of people, the number of followers speaks for itself. . [I have one of] the most attractive accounts, social media accounts, perhaps in the world, certainly on Twitter, and that actually predates the acquisition. So Twitter is actually an incredibly powerful tool for driving demand for Tesla. And I really encourage all types of automotive or other companies to use Twitter more and use their Twitter accounts in a way that is interesting, informative, entertaining, and it will help drive sales, just like Tesla did. “

Services and other revenue for Tesla, which includes reimbursements for out-of-warranty vehicle repairs, among other things, reached $1.6 billion in the quarter.

Power generation and storage revenues increased sequentially and year over year, reaching $1.31 billion. However, revenue costs for the energy division were high at $1.15 billion in the fourth quarter.

The company did not provide new guidance, but reiterated: “We plan to grow production as quickly as possible in line with the 50% compound annual growth target that we started pursuing in early 2021.”

Tesla said it had installed the capacity – in all of its factories – to make 100,000 Model S and X vehicles and 1.8 million Model Y and Model 3 vehicles annually.

The production capacity in Shanghai will enable Tesla to produce 750,000 Model 3 and Model Y electric cars annually, the company said, while its first factory in Fremont, Calif., can make 100,000 of its more expensive Model S and X vehicles, and 550,000 of its Model 3 and Y vehicles. Factories in Austin, Texas and near Berlin, Germany, each have the capacity to make 250,000 Model Y vehicles annually, the company says.

Tesla also said about 400,000 customers in North America now have the opportunity to test out its experimental “FSD Beta” driver assistance system. The company recognized $324 million of deferred revenue for the quarter related to FSD, it said in a shareholder presentation.

This driver assistance system is only available to customers who purchase or subscribe to Tesla’s premium driver assistance package, marketed as FSD or Full Self-Driving. Tesla doesn’t make autonomous vehicles, or a driver assistance system that is safe to use without a driver behind the wheel, always ready to steer and brake. FSD Beta includes new software features that the company has not yet fully tracked down.

The company also reiterated that its Cybertruck pickup is on track to enter production in Texas this year.

Earlier this month, Tesla reported vehicle delivery and production numbers for the fourth quarter of 2022 that set a new record for the company, but fell short of the company’s goals and analysts’ expectations, despite price cuts for its cars in December to urge customers to to accept deliveries before the end of the year.

Tesla reported 405,278 vehicle deliveries and production of 439,701 vehicles for the period ending December 31, 2022. Full-year deliveries were approximately 1.31 million, a record for Tesla, after the company began production at its new factories in Texas and Germany.

This is the latest news. Check back later for updates.

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