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Thursday, March 23, 2023

Tesla Reveals Record $3 Billion Quarterly Profits

Tesla reported a $3.3 billion profit in the first quarter of 2022, despite supply chain challenges and production delays in China. Tesla reported a profit of $18.7 billion on revenue of slightly over $18.7 billion. When compared to $10.4 billion in sales in Q1 2021, this is an 81 percent growth year over year.

In Q4 2021, the firm sold $679 million in emission credits to other manufacturers, up from $314 million in Q4 2021. The corporation makes money by selling credits to automakers who produce fewer “clean” automobiles than the US government and the European Union need.

In previous years, the credit sales came in useful, allowing Tesla to make a profit while its car-making firm suffered. Without accounting for emission credit sales, the company said that its manufacturing and energy sales businesses were profitable for the first time last summer.

It was unquestionably a significant quarter for Tesla. The business established two additional plants in March — one in Berlin and the other in Austin, Texas — but was forced to close its Shanghai production for several weeks due to escalating COVID numbers. Tesla’s figures were projected to suffer this quarter as a result of the expenditures of opening those two facilities, as well as its struggle to keep its Chinese production operational.

Model Y deliveries from Texas began in April, according to the business, which began production in Berlin last month. The business also stated that its structural battery packs with 4680 cells, as well as the conventional packs with 2170 cells, will be manufactured in Texas later this year.

The financial update comes on the heels of a strong quarter for Tesla in terms of deliveries and production. In Q1 2022, the business reported it delivered 310,048 automobiles to its clients. Elon Musk, Tesla’s CEO, called the achievement “exceptionally tough,” noting global supply chain challenges and the company’s Shanghai factory’s shutdown amid escalating COVID case numbers. Despite this, Musk stated on the conference call that the firm will be able to increase production and produce 1.5 million vehicles this year.

Tesla claimed to have delivered 295,324 Model 3 and Model Y automobiles, as well as 14,724 Model S and X vehicles. Deliveries grew marginally from the previous quarter’s 308,600 shipments and exceeded Tesla’s 184,800 shipments in the first quarter of 2021, a 68 percent increase year over year. Tesla produced 305,407 automobiles in the last three months, according to the company.

In Q1 2022, the corporation maintained its trend of making more per car, with a gross automotive margin of 32.9 percent, up from 26.5 percent in Q1 2021. The firm claims that it boosted the average selling price of its automobiles and increased the number of cars it delivered in its investor notes.

Tesla outperformed its competitors in navigating the global supply chain problem, producing record deliveries and profitability for multiple quarters. By acquiring new semiconductors and rewriting software on the fly, the business was able to sidestep the same problems as other big manufacturers.

Tesla had a hectic quarter for reasons unrelated to its profitability as well. A pedestrian warning sound that was being obscured by loud music played over the external “Boombox” speakers, as well as an aspect of the Full Self-Driving beta software that allowed vehicles to roll through some stop signs without coming to a complete stop, were among the features that were recalled.

Tesla’s legal woes worsened in the third quarter. After many employees reported racial discrimination and harassment, the corporation was sued by California’s civil rights office. After reporting a hostile work environment where he heard “everyday racist epithets,” a Black former Tesla employee was granted $137 million in damages. (The award was eventually lowered to $15 million by a judge, who called the jury’s finding “excessive.”)

And, of course, there’s Elon Musk’s stunning $48 billion offer to acquire Twitter. It’s unclear how Musk’s hostile takeover efforts will effect Tesla or its shareholders, but considering the amount of crucial milestones Tesla still needs to reach this year, it’s awful timing at the very least.

Cedric Blackwater
Cedric Blackwater
Cedric is a journalist with over a decade of experience reporting on local US news, and touching on many global topics. He is currently the lead writer for Bulletin News.

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