Tesla Reported Net Income Of $3.318 Billion In The First Quarter Of 2022

On April 20, Tesla reported its first quarter 2021 earnings, with its revenue reaching $18.756 billion, up 81% year-over-year; net income reaching $3.318 billion, up 658% year-over-year, and adjusted earnings per share of $3.22, higher than analysts' estimates of $2.27. As of the end of the first quarter, Tesla's outstanding recourse debt had fallen to below $100 million.

As per the first-quarter earnings report, Tesla's net profit margin reached 17.7 percent, compared to a previous high of 13.1 percent. This is a figure that is difficult for traditional automakers to reach, which is why the latter are also studying and emulating Tesla's R&D and production efficiency.

For its part, Tesla said the improvement in net profit was driven by increased vehicle deliveries, higher average selling prices per vehicle, lower costs per vehicle, and increased sales of regulatory credits. In the first quarter, Tesla generated $679 million in revenue from regulatory credit sales, up 31 percent year-over-year. Climbing raw material prices, logistics prices and increased operating expenses, on the other hand, had a negative impact on profits.

It is also worth noting that the gross margin of Tesla's automotive business was 32.9%, a 6.36% year-over-year improvement and another record high. With a gross margin of nearly one-third, this means that Tesla can earn a gross profit of more than 100,000 yuan for every car sold according to the domestic Model Y selling price.

In terms of new vehicle deliveries, in the first quarter of 2022, Tesla produced 305,400 vehicles, up 69% year-on-year; and delivered 310,000 vehicles, up 68% year-on-year. However, it was just slightly higher compared to the previous quarter, barely flat.

This follows a shutdown of Tesla's Shanghai mega-factory for more than three weeks, with a loss of capacity of at least 30,000 vehicles during the shutdown. The plant has now resumed work and capacity is gradually climbing. Tesla CEO Musk predicted that Tesla's Shanghai mega-factory would produce the same amount of units in the second quarter as it did in the first quarter, but would achieve high production in the third and fourth quarters. He also estimated that "Tesla could produce 1.5 million cars this year."

This year, Tesla's Berlin super factory and Texas super factory have been put into operation. Musk noted that the initial capacity growth of the two factories was slow, but it was well thought out and will grow rapidly in the future, with high production expected to be achieved next year.

Musk said Tesla's goal is to achieve 20 million units of annual production by the end of 2030, and has already achieved 5% of this goal. Although affected by multiple factors such as the supply chain, deliveries are still expected to achieve an average annual growth of 50%.

Since this year, Tesla has made several price increases in the Chinese and U.S. markets.

Tesla said that in addition to the impact caused by the chip shortage, the epidemic also continues to put pressure on the supply chain and factory operations. In addition, the prices of some raw materials have risen several times in recent months. So although Tesla has been working to reduce manufacturing costs as much as possible, the combination of multiple factors has prompted it to adjust its product pricing.

The price increase strategy of shifting the cost pressure to consumers has indeed had a significant effect, as seen in the earnings data.

Much higher than the market expectations of the financial indicators, will today's decline of nearly 5% of Tesla shares in the after-hours straight line up, up more than 6% at one point, recapture the trillion market value.

About Author
John Murphy

John Murphy is the founder of TOPCARS Tesla Aftermarket Accessories, as well as an investor in Tesla and owner of the Model Y. He posts about Tesla news while running the site on a daily basis.

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