Tesla (TSLA) earnings This autumn 2022

Electrical automobile maker Tesla reported earnings after the bell, beating on each earnings and income. Shares rose greater than 5% after hours after CEO Elon Musk stated the corporate may be capable to produce 2 million vehicles this yr. Listed below are the outcomes.

• Earnings (adjusted): $1.19 vs $1.13 per share anticipated, per Refinitiv
• Income: $24.32 billion vs $24.16 billion anticipated, per Refinitiv

Within the year-ago quarter, Tesla reported income of $17.72 billion and adjusted earnings of $2.52 per share ($0.85 adjusted for an Aug. 2022 inventory cut up).

Tesla reported automotive income of $21.3 billion within the fourth quarter, representing 33% progress year-over-year. $467 million of that got here from regulatory credit within the fourth quarter of 2022, up by almost half from the prior yr in the identical interval.

Automotive gross margins got here in at 25.9%, the bottom determine within the final 5 quarters. Working money movement was down 29% from final yr, and down 36% from final quarter, coming in at $3.28 billion.

In a shareholder deck, the corporate acknowledged that common gross sales costs have “typically been on a downward trajectory for a few years,” and stated “affordability” could be vital for Tesla to develop into an organization that sells a number of hundreds of thousands of vehicles yearly.

In late 2022 and this yr, Tesla minimize costs on its vehicles around the globe, upsetting clients within the US and China who lately purchased new Teslas at increased costs, and triggering an immediate decline in used Tesla costs within the US as nicely.

The worth cuts appear to have sparked demand, nevertheless. Talking on a name with shareholders and analysts on Wednesday, CEO Elon Musk stated, “To this point in January we have seen the strongest orders year-to-date than ever in our historical past. We’re presently seeing orders of virtually twice the speed of manufacturing.”

One analyst requested Musk why Tesla’s steerage for manufacturing was simply 1.8 million in 2023 after the corporate has been ramping up manufacturing at its new factories.

Musk replied, “We’re saying 1.8 as a result of there all the time appears to be some friggin’ pressure majeure factor that occurs someplace on Earth. We do not management if there’s earthquakes, tsunamis, wars, pandemics, and many others. If it is a easy yr, with out some massive provide chain interruption or huge downside we now have the potential to do 2 million vehicles this yr. I feel there could be demand for that, too.”

The corporate didn’t challenge new steerage, however reiterated in its earnings launch, “We’re planning to develop manufacturing as shortly as doable in alignment with the 50% compound annual progress charge goal we started guiding to in early 2021.”

Musk additionally answered an analyst query about his buy of Twitter by selling the social media service as a good way to attach with clients.

“I’ve bought 127 million followers. And it continues to develop quickly. That is that means that I am fairly widespread. I may not be widespread with some folks. However for the overwhelming majority of individuals, just like the follower depend speaks for itself. [I have one of] essentially the most enticing accounts, social media accounts, perhaps on this planet, actually on Twitter, and that truly predated the acquisition. So Twitter is definitely an extremely highly effective device for driving demand for Tesla. And I actually encourage firms on the market of every kind automotive or in any other case to make extra use of Twitter and to to make use of their Twitter accounts in methods which are fascinating and informative, entertaining, and it’ll assist drive gross sales simply because it has with Tesla.”

Providers and different income for Tesla, which incorporates charges for out-of-warranty automobile repairs, amongst different gadgets, reached $1.6 billion within the quarter.

Income from vitality era and storage was up sequentially and year-over-year, reaching $1.31 billion. The price of income for its vitality division was excessive, although, at $1.15 billion within the fourth quarter. 

Tesla stated that it had put in the capability — throughout all of its factories — to make 100,000 Mannequin S and X automobiles yearly, and 1.8 million Mannequin Y and Mannequin 3 automobiles.

Manufacturing capability in Shanghai permits Tesla to producer 750,000 Mannequin 3 and Mannequin Y electrical vehicles yearly, the corporate reported, whereas its first manufacturing unit in Fremont, California, could make 100,000 of its higher-priced Mannequin S and X automobiles, and 550,000 of its Mannequin 3 and Y automobiles. Factories in Austin, Texas and close to Berlin, Germany, every have capability to make 250,000 Mannequin Y automobiles yearly, the corporate says.

Tesla additionally stated that roughly 400,000 clients in North America now have the flexibility to check out its experimental, “FSD Beta” driver help system. The corporate acknowledged deferred income of $324 million for the quarter associated to FSD, it stated in a shareholder presentation.

This driver help system is simply accessible to clients who buy or subscribe to Tesla’s premium driver help package deal, marketed as FSD, or Full Self-Driving functionality. Tesla doesn’t make autonomous automobiles, or a driver help system that’s protected to make use of with out a driver behind the wheel, able to steer and brake always. FSD Beta incorporates new software program options that the corporate has not but absolutely debugged.

The corporate additionally reiterated that its Cybertruck pickup is on monitor to begin manufacturing this yr in Texas.