Tesla posted profits after the bell, exceeding expectations on both earnings and revenue. Shares surged more than 5% after CEO Elon Musk claimed the business may build 2 million cars this year. Here are the outcomes.
• Adjusted earnings per share: $1.19 vs. $1.13 anticipated
• Revenue: $24.32 billion vs the projected $24.16 billion
Tesla reported $17.72 billion in sales and adjusted earnings of $2.52 per share in the prior period ($0.85 adjusted for an August 2022 stock split). Tesla announced $21.3 billion in automotive revenue in the fourth quarter, a 33% increase year on year. In the fourth quarter of 2022, regulatory credits contributed $467 million, an increase of nearly half from the same time the previous year.
Automotive gross margins were 25.9%, the lowest in the previous five quarters. Operating cash flow was down 29% year on year and 36% year on quarter, totaling $3.28 billion.
In a shareholder presentation, Tesla recognized that typical sales prices have “usually been on a decreasing track for many years,” and that “affordability” is required for Tesla to expand into a company that sells millions of vehicles each year.
Tesla dropped pricing on its vehicles throughout the world in late 2022 and this year, upsetting consumers in the United States and China who had just purchased new Teslas at higher costs and causing an immediate drop in used Tesla values in the United States.
However, the price drops appear to have increased demand. “Thus far in January, we’ve seen the strongest orders year-to-date than ever in our history,” CEO Elon Musk said on a teleconference with shareholders and analysts on Wednesday. We’re presently seeing orders that are nearly double the rate of manufacturing.”
Tesla’s services and other revenue, which includes payments for out-of-warranty car repairs and other items, totaled $1.6 billion in the third quarter. Energy generation and storage revenue increased sequentially and year over year, reaching $1.31 billion. However, the cost of revenue for its energy segment was high in the fourth quarter, at $1.15 billion.
Tesla stated that it has built capacity in all of its plants to produce 100,000 Model S and X vehicles per year, as well as 1.8 million Model Y and Model 3 automobiles. According to the company, Tesla’s Shanghai facility can produce 750,000 Model 3 and Model Y electric cars each year, whereas its first factory in Fremont, California, can produce 100,000 of its higher-priced Model S and X vehicles and 550,000 of its Model 3 and Y vehicles. According to the corporation, factories in Austin, Texas, and near Berlin, Germany, each have the potential to produce 250,000 Model Y automobiles each year.