Tesla reports better-than-expected profits, optimistic for EV
In the latest quarter, Tesla Inc. reported better than expected profits, signaling strength as it faces growing questions about carbuyer demand for its all-electric vehicle lineup.
The Austin, Texas-based company reported adjusted earnings of $1.19 a share, better than the $1.12 a share average of analysts compiled by Bloomberg.
The EV market leader said it would increase output as quickly as possible, in line with previous guidance for average annual growth of 50% over multiple years, and said it is on track to deliver about 1.8 million vehicles this year.
It may grow faster or slower in some years, depending on a number of unspecified factors, it may also leave room for some wiggle room, noting it may grow faster or slower in some years.
The stock was little changed in extended trading in New York, erasing much of an earlier spike.
The company warned of an uncertain economic environment, especially with interest rates rising.
In the near term, we are accelerating our cost reduction roadmap and driving towards higher production rates while staying focused on the next phase of our roadmap, it said in a statement to shareholders.
As deliveries grow and the industry shifts towards battery-powered vehicles, the automaker has become a bellwether for the global auto market. It now has four auto plants in three continents, including its newest plant in Austin. The company said its factories had the capacity to build more than 1.9 million vehicles annually.
Tesla is on track to build the long-awaited Cybertruck in Austin later this year. The investor day will be on March 1 and it will discuss more details of its next-generation vehicle platform.
During a conversation last month, Chief Executive Officer Elon Musk predicted a serious recession and warned consumers to cut back on big-ticket purchases. This month, Tesla has slashed prices across its lineup.
Tesla's fourth quarter revenue was $24.3 billion, slightly exceeding market expectations. The gross automotive margins were 25.9%, a lower than the average estimate of 28.4%, a sign of potential concern for investors after a recent round of price reductions. The gross automotive margin was 30.6% in the year-earlier period.
The sale of regulatory credits was used by other automakers to offset greenhouse gas emissions, and came to $467 million, up from $286 million in the prior quarter and $314 million a year ago. As competitors launch more EVs to comply with emissions regulations and meet growing demand, Tesla expects to shrink the revenue over time.
Musk is expected to join the company's conference call later Wednesday, his first session with analysts since he bought Twitter Inc. for $44 billion in late October. The stock, which has fallen 53% over the past 12 months, has fallen 53% due to his move to fund the acquisition in part by selling shares of Tesla.
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