NEW YORK: Tesla reported another banner quarter of profit growth yesterday as the rapid expansion of electric vehicle (EV) manufacturing capacity boosted sales despite ongoing supply chain problems.
Elon Musk’s high-flying EV company reported first-quarter profit of US$3.3 billion (RM14.1 billion), up 658% from the year-ago period on an 81% jump in revenue to US$18.8 billion.
The strong profit follows the unveiling of two new factories during the quarter in Germany and the US state of Texas, with that positive development offset somewhat by a temporary shutdown of its China factory due to Covid-19.
Tesla also cited a boost from higher retail prices enacted in part due to rising production costs in the face of semiconductor shortages and difficulties procuring other key supplies.
“Prices of some raw materials have increased multiple-fold in recent months,” Tesla said. “The inflationary impact on our cost structure has contributed to adjustments in our product pricing, despite a continued focus on reducing our manufacturing costs where possible.”
“Price increases are nicely exceeding cost inflation,” said Craig Irwin at Roth Capital. “Chinese production issues seem well managed, and we expect Austin and Berlin to make up the slack from Shanghai’s 19-day outage.”
Tesla raised its prices in China, the US and other countries, after Musk said in March that Tesla was facing significant inflationary pressure in raw materials and logistics amid the crisis in Ukraine.
The results are the latest in a series of strong earnings that has brought glory to Musk, who has most recently launched an unsolicited bid to acquire Twitter.
A closely watched focus of analysts has been the impact of Covid-19 lockdowns on Tesla’s Shanghai plant.
Without quantifying the impact to vehicle output, Tesla said, “although limited production has recently restarted, we continue to monitor the situation closely”.
The company maintained its multi-year target of growing 50% average annual growth in deliveries, while alluding to the constraints of the current market.
“Our own factories have been running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through the rest of 2022,” Tesla said.
Shares rose 4.1% to US$1,017.02.
On an investor conference call, Musk said Tesla has a reasonable shot at achieving 60% vehicle delivery growth this year and remains confident of seeing 50% annual delivery growth for several years.
“Our own factories have been running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through the rest of 2022,” Tesla said in a statement.
Tesla’s pre-tax profit (ebitda) per vehicle delivered rose by more than 60% to US$16,203 in the latest quarter compared with a year earlier. – AFP, Reuters