Unlike the weak quarterly report from Netflix on Tuesday, Tesla did its bit and a bit more for investor confidence in the megatechs with record revenue and earnings in the three months to March.
The EV, solar and battery giant reported March quarter revenue and earnings improvements that more than offset fears about the negative impact from the lockdown of its Shanghai factory.
The company’s shares had lost nearly 5% to just over $US977 in regular trading ahead of the after the bell results release, but as investors scanned the headlines and then the details, that loss was more than reversed and the shares traded more than 6% higher and back over $US1,000 each.
But the exuberance gradually faded and at 8am Sydney time the shares had eased to a gain of just over 4% which was still a solid reaction.
Tesla reported automotive revenue up 87% from a year earlier at $US16.86 billion. Gross profit margins in its car making business jumped to 32.9% with Tesla reporting gross profit of $US5.54 billion in its main segment. Net profit jumped 658% to $US3.32 billion for the quarter.
Tesla said the revenue growth was driven by the increase in the number of cars Tesla to buyers and an increase in average sales prices as the company sought to recover higher costs.
Early this month, Tesla reported of 310,048 for the first quarter, (the closest approximation of sales disclosed by the company). That was up sharply from the 184,800 delivered a year early. production for the March, 2022 quarter was 305,000, up from 180,338 a year earlier.
That surge in output will continue for the rest of this year as the new plants in Texas and Germany ramp up output and Tesla expects deliveries to grow by 50% a year for a while, even with the continuing component shortages and higher costs.
In its energy segment, Tesla’s solar deployments dropped by nearly half to 48 MW in the first quarter of 2022 versus the same time last year. The company deployed 846 MWh of lithium ion-based battery energy storage systems, up 90% from the same time last year, but down from the December quarter.
The company said declines in solar deployments were caused by import delays on certain components that were beyond Tesla’s control.
Tesla warned that its stocks of components and vehicles were down to worrying lows.
Tesla said its global vehicle inventory fell to a three-day supply in the first quarter of 2022. That’s down from a four-day supply of global vehicle inventory in the previous quarter, and eight-day supply during the first quarter of 2021.
“Our own factories have been running below capacity for several quarters,” Tesla said.
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Meanwhile on an earnings call after the results were issued, chief financial officer Zachary Kirkhorn and CEO Elon Musk said the company remains confident that it can grow at least 50% over 2021 numbers.
But they noted that the company has lost about a month of “build volume” in Shanghai due to Covid-related shutdowns (that’s about 60,000 vehicles).
But they claimed June quarter production at the Shanghai factor will be about the same as the March quarter. In March alone Tesla produced a record 65,814 units, all but 60 of them were for local delivery. That included four days of Covid-driven shutdowns. That was up from 56,5125 in February.
“Production is resuming at limited levels, and we’re working to get back to full production as quickly as possible,” Kirkhorn said.
Despite this slowdown, Musk said, “It seems likely that we’ll be able to produce one and a half million cars this year.” He warned customers ordering now face a long waitlist, and some of their orders won’t arrive until next year.
Musk also acknowledged that autonomous driving advances were taking longer than he anticipated.
“With respect to full-self driving, of any technology development I’ve ever been involved in, I’ve never really seen more kind of false dawns where it seems like we’re going to break through but we don’t.”
