Supply chain constraints and global chip shortage which has scuttled production around the world did not stop Tesla from turning up big in the first quarter of 2022. The electric vehicle manufacturer reported that it earned a whopping $3.3 billion profit in the first quarter.
Tesla recorded an 81 percent increase year over year compared to the same quarter last year, when it made $10.4 billion in revenue. The company announced over $18.7 billion profit to beat its record in the same quarter last year.
The Verge’s report (below) on Tesla’s first quarter earning delves into how the automaker maneuvered its way out of the hurdles that incapacitated other manufacturers and greatly undermined their profits.
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Tesla logged $679 million in emission credit sales to other automakers, compared to $314 million in credit sales in Q4 2021. The company generates this revenue by selling these credits to automakers that make fewer “clean” vehicles than are required by the US government and the European Union.
The credit sales have come in handy in past years, helping Tesla eke out a profit while its car-making business struggled. Last summer, the company reported that its manufacturing and energy sales business was profitable for the first time without counting emission credit sales.
It was undoubtedly a noteworthy quarter for Tesla. The company opened two new factories — one in Berlin on March 22nd and the second in Austin, Texas, on April 8th — while also being forced to shutter its Shanghai factory for several weeks amid rising COVID numbers. The costs of opening those two factories, while also struggling to keep its Chinese factory in operation, were expected to weigh down Tesla’s numbers this quarter.
The company says it started production in Berlin last month, and that it started Model Y deliveries from Texas in April. The company also mentioned it’ll produce its structural battery packs with 4680 cells in Texas later this year, alongside the standard packs with 2170 cells.
The earnings report also follows a robust quarter for delivery and production for Tesla. The company said it sent 310,048 vehicles to its customers in Q1 2022. Tesla CEO Elon Musk described that feat as “exceptionally difficult,” citing global supply chain issues and the closure of the company’s factory in Shanghai amid rising COVID case numbers. Despite that, Musk also predicted on the earnings call that the company would be able to ramp up production and make 1.5 million cars this year.
Tesla said it delivered 295,324 Model 3 and Model Y vehicles, while 14,724 were for the Model S and X. Deliveries increased slightly from the previous quarter’s 308,600 deliveries and outpaced the 184,800 shipments Tesla made in the first quarter of 2021, representing a 68 percent year-over-year increase. On the production side of things, Tesla said it built a total of 305,407 vehicles during the past three months.
The company has also continued its trend of making more per car — its gross automotive margin was 32.9 percent in Q1 2022, compared to 26.5 percent in Q1 2021. In its notes to investors, the company says it increased the average selling price of its cars and grew the number of cars it was delivering.
Tesla navigated the global supply chain crisis better than its rivals, posting record deliveries and profits for several quarters. The company was able to avoid the same kinds of headaches as other global automakers by sourcing different chips and rewriting software on the fly.
Tesla posted a record profit of US$3.32 billion for the first quarter, even as a pandemic-induced shutdown of its Shanghai factory crimped output. The results blew past analysts’ expectations and compare with earnings of US$438 million a year earlier. Sales jumped 80% after the world’s most valuable carmaker delivered 310,000 electric vehicles. Chief executive Elon Musk also said Tesla would likely produce more than 1.5 million vehicles this year despite supply chain challenges, reflecting a 60% increase. (LinkedIn)