Elon Musk appeared radiantly at Tesla’s meeting, reporting a profit of more than 5 billion USD/quarter
According to Bloomberg, Tesla has reported better-than-expected first-quarter results, fueled by strong demand for its electric vehicles. CEO Elon Musk predicts that output will increase rapidly for the rest of the year despite supply chain challenges.
As the first major US automaker to report financial results for the first three months, Tesla easily beat previous projections with a record profit. Even so, the company warned that production is still constrained by shortages or higher prices for key components, a common cause for automakers due to global congestion. on the supply of components such as semiconductors.
However, CEO Musk said Tesla will be able to make up for any production shortfalls in the first half of the year due to Covid-19-related shutdowns at its factory in Shanghai and is on track to reopen. expanding production to more than 1.5 million vehicles this year. The company delivered about 936,000 vehicles in 2021.
“We can do the unexpected,” Musk said during Wednesday’s quarterly earnings call. “Q3 and Q4 will be significantly higher.”
The Austin, Texas-based company posted strong profits and revenue in its first three months, including the sale of regulatory emissions credits totaling $679 million — more than double that with the previous quarter. Tesla has generated billions of dollars through the sale of emissions credits that allow other automakers to comply with more stringent emissions regulations. However, Chief Financial Officer Zach Kirkhorn said that the increase in emissions credit sales was mainly due to a one-time $288 million gain related to tougher US emissions penalties.
“Emissions credits will be down year-on-year,” the chief financial officer told analysts.
Tesla has repeatedly said it expects emissions credits revenue to decline over time as more and more automakers roll out electric vehicles to meet growing demand for battery-powered vehicles. . Still, rival automakers are still far behind Tesla, even as the Biden administration has pushed for that change through harsher fuel-economy standards.
“That speaks to the position of the rest of the auto industry when it comes to selling electric vehicles in bulk,” said Gene Munster, managing partner at Loup Ventures. “They’re still behind” Tesla, he said.
Tesla shares rose 7.1% to $1,046.99 a share in Wednesday’s trading.
While Tesla remains the world’s most valuable auto company, with a market capitalization of $1.01 trillion, its stock is down 7.5% this year amid concerns about the global shortage of critical components. But the company has outperformed other major rivals, such as General Motors and Ford Motor, whose shares fell 29% and 23%, respectively.
SUPERIOR NUMBERS
Tesla’s gross profit in the auto segment in the first quarter was $ 5.54 billion. Revenue rose to $18.8 billion, versus an estimate of $17.9 billion.
Increasing sales of higher-margin vehicles and cutting costs helped Tesla improve its automotive gross margin to 32.9%. Dan Levy, a Credit Suisse analyst with a “better” rating on the stock, said Tesla’s higher margins were a “positive surprise” that bodes well for cost control. and boost sales.
“Cost improvements are critical, as we believe Tesla will eventually use cost improvements to finance lower-priced vehicles,” he wrote in a research report.
Positive business results helped the company’s cash flow increase to $ 18 billion in cash and cash equivalents as of the end of the quarter. Debt also gradually fell below $100 million by the end of the quarter. The global electric vehicle market leader is expanding on three continents, with new plants in Austin and Berlin alongside existing plants in California and Shanghai. This is expected to help them meet – or exceed – their stated goal of 50% annual growth.
Notably, during Wednesday’s meeting, Musk refrained from giving any scandalous information and was not asked about the $43 billion plan to acquire Twitter.
Tesla has long talked about customers having the ability to turn their cars into a fleet of driverless cars, but the company is now working on a new model – without a steering wheel or pedals – that would be a robotaxi. dedicated. Musk vowed to launch the car within the next two years and achieve “mass production” by 2024.
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