Tesla (TSLA-US) announced its fourth-quarter financial report on Wednesday (25th). The company’s profit and revenue were better than expected, but the overall gross profit margin was not as expected. Its stock price rose by nearly 2% in the after-hours trading session.
Key fiscal figures vs. analyst expectations
- Q4 revenue: $24.32 billion vs. $24.07 billion expected
- Adjusted EPS: $1.19 vs. $1.12 expected
- Overall gross margin was 23.8%, vs. 25.4% expected
- Automotive gross margin was 25.9%, vs. 28.4% expected
- Full-year revenue rises 51% to $81.46 billion, missing expectations
- Earnings per share rise 80% to $4.07, topping estimates
Although the number of vehicles delivered in recent quarters has not met the target, the company stated that it will increase production as soon as possible to achieve the long-term delivery target of 50% CAGR (compound annual growth rate). However, the company expects to deliver about 1.8 million vehicles this year, implying an annual growth rate of about 37%.
Seek to quickly increase production capacity
“In the near term, we are accelerating our cost reduction roadmap and driving higher production rates, while remaining focused on executing the next phase of our roadmap,” Tesla said in a statement to shareholders.
The automaker has become a leader in the global auto market as its deliveries have grown and it now has four auto plants on three continents, including its newest in Austin. Tesla said the factory currently has the capacity to produce more than 1.9 million vehicles per year.
Tesla roughly doubled its production capacity in 2022 and has been increasing production every quarter of the year, with annualized production forecasts for the fourth quarter hitting a record high.
Tesla will sell 1,313,851 vehicles in 2022, up 40% from 2021 but below its 50% target. The Model 3 sedan and Model Y crossover accounted for the vast majority of sales.
Tesla confirmed that it is still on track to start building the long-awaited Cybertruck in Austin later this year. It will discuss more details of its next-generation vehicle platform at its investor day on March 1.
Musk says price cuts boost demand
While Tesla implemented multiple price cuts in the U.S., China and some European markets, those price cuts didn’t happen until the first quarter of the year, so the impact didn’t show up in the fourth-quarter earnings report.
Musk told investors on Wednesday that so far in January, Tesla has “received some of the strongest orders in our history to date.” It was his first meeting with analysts since he bought Twitter for $44 billion in late October. His move to partially fund the acquisition by selling Tesla shares has weighed on shares, which have fallen 53% over the past 12 months.
The Tesla CEO said that orders are currently growing at “almost twice the rate of production,” and “I think there’s just a lot of people who want to buy Tesla cars but can’t afford them, so these price changes really have an impact on the average consumer. affected”.
Musk said that price really matters, and that demand for Tesla will be good even though the overall auto market may shrink.