SAN FRANCISCO, April 20 (Reuters) – The results of Tesla Inc (TSLA.O) exceeded Wall Street’s expectations on Wednesday, as higher prices helped isolate the electric vehicle maker from the chaos in the supply chain and rising costs.
The results should also trigger $ 23 billion in new payouts to CEO Elon Musk, who is already the richest man in the world.
Tesla has been outstanding since the pandemic erupted, posting record deliveries and profits for several quarters when rivals battling global supply chain problems halted production.
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Shares of Tesla rose 5% after the close of regular trading.
During a conference call with investors, Musk said Tesla has a reasonable chance of achieving 60% growth in vehicle supplies this year and remains confident that it will see 50% annual growth in supply over several years.
Tesla has raised prices in China, the United States and other countries after Musk said in March that the American electric car maker was facing significant inflationary pressures on raw materials and logistics amid the crisis in Ukraine.
“Our own factories have been operating below capacity for several quarters, as the supply chain has become a major limiting factor, which is likely to continue until the end of 2022,” said a statement from Tesla.
Price increases are designed to cover higher costs for the next six to 12 months, which protects Tesla in orders for cars that may not deliver for a year.
“Rising prices far outweigh cost inflation,” said Craig Irwin of Roth Capital.
“The problems with Chinese production seem to be well managed and we expect Austin and Berlin to make up for the lack of a 19-day break in Shanghai,” he said, referring to Tesla’s two new plants in Texas and Germany that began deliveries in recent months.
The results allowed Musk to meet a hat-trick of targets for a total of $ 23 billion in new compensation. He does not receive a salary and his salary package requires Tesla’s market capitalization and financial growth to achieve a series of escalating goals. Read more
The world’s most valuable carmaker said revenue was $ 18.8 billion in the first quarter ended March 31, compared to estimates of $ 17.8 billion, according to Refinitiv’s IBES. This is 81% more than a year earlier.
Revenue from sales of its regulatory loans to other automakers jumped 31 percent to $ 679 million in the first quarter from a year earlier, helping boost revenue and profits.
Its earnings per share were $ 3.22, exceeding analysts’ estimates of $ 2.26.
Model Y cars are pictured during the opening ceremony of the new Tesla Gigafactory for electric cars in Gruenheide, Germany, March 22, 2022. Patrick Pleul / Pool via REUTERS
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Tesla’s pre-tax profit (EBITDA) on the delivered vehicle increased by more than 60% to $ 16,203 in the last quarter compared to a year earlier.
Tesla said it lost about a month of construction from its Shanghai plant due to COVID-related shutdowns. He said production is resumed at limited levels, which will affect the total volume of construction and delivery in the second quarter.
Musk expected Tesla’s overall production in the current quarter to be similar to that in the first quarter.
Presentation of the share price, profits and sales for Tesla
LITHIUM IS SOFTWARE
Musk said lithium was responsible for increasing costs and was a “limiting factor” for the growth of electric vehicles.
He encouraged companies to enter the lithium business, which he said would generate high margins due to high prices.
“Lithium margins are now practically software margins … Do you like digging money? Well, the lithium business is for you.”
He also said Tesla would have “some exciting announcements in the coming months” about providing raw materials for batteries.
Musk said his own 4680 batteries would become a risk to production next year if he did not decide on volume production by early 2023. “But we are very confident that we will.” He also said he would use his existing 2170 batteries for Texas-made vehicles to mitigate the risk.
Musk said Tesla expects to mass-produce robots without a steering wheel or pedal by 2024.
During the conversation, Musk did not mention Twitter (TWTR.N), which offered to buy last week for $ 43 billion. Investors are worried that he may sell some Tesla shares or take a loan against additional Tesla shares to fund his offer.
Investors are also worried that Musk is distracted by his Twitter offer at a time when Tesla is increasing production at new plants in Berlin and Texas.
“Factory ramps take time and Gigafactory Austin and Gigafactory Berlin-Brandenburg will be no different,” Tesla said in a statement.
The new plants will be key to meeting demand and reducing dependence on China’s largest plant, which is recovering after the plant shut down. Read more
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Report by Hyunjoo Jin in San Francisco and Akash Sriram in Bengaluru and Joe White in Detroit; Edited by Peter Henderson and Lisa Shoemaker
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