Series of record sales breaks
More expensive cars increase Tesla’s profits
07/20/2022, 11:14 p.m
Despite problems with its own car factories in Grünheide, Texas and Shanghai, Tesla’s quarterly figures do not disappoint. The car manufacturer cannot increase sales any further, but it can increase profits.
The electric car manufacturer Tesla has also increased its profit thanks to price increases. In the past quarter, the bottom line was $2.26 billion, after $1.14 billion a year ago, the group said. However, sales fell – after Tesla had rushed from record to record here for many quarters.
Nevertheless, the group was optimistic about the rest of the year: With the factories in Fremont and Shanghai and new production facilities, “we are concentrating on a record-breaking second half of 2022,” it said. In June, CEO Elon Musk said the new factories in Grünheide near Berlin and Texas were currently burning billions. Tesla’s revenue fell from $18.76 billion to $16.93 billion from the first to the second quarter, below analysts’ expectations. This ended a string of record sales as Tesla had to temporarily close its Shanghai plant due to a lockdown. There were also production problems in new plants.
Musk had already pointed to difficulties in Grünheide and Texas in June – due to a lack of batteries and supply chain problems due to the closure of Chinese ports. The past two years have been a “nightmare,” Musk said at the time. “And we’re not done with that yet.” The group recently laid off employees, following a plan by Musk, who also said in June that he had “a very bad feeling about the economy”.
The competitive situation has also intensified for Tesla. Tesla did not name figures for the expected production in Grünheide and Texas on Wednesday. The group reaffirmed its goal of increasing its annual deliveries by an average of 50 percent over a multi-year horizon. However, there was no forecast for this year. Musk said in April that Tesla plans to increase deliveries by 60 percent in 2022. That would correspond to almost 1.5 million vehicles. Analysts had described this as a very optimistic forecast. Tesla has raised the prices of its vehicles several times this year. Among other things, this should compensate for higher costs for lithium, which is used in the batteries, and for aluminium. The long-distance version of the Tesla “Model Y” now costs $65,990 – almost a third more than at the beginning of 2021.
Investing.com analyst Jesse Cohen spoke of a “solid” quarter for Tesla. This is the latest sign so far that Tesla has done an excellent job in tackling the global supply chain and logistics challenges “and weathered the storm better than most other automakers,” said Cohen. Tesla produces more efficiently and is therefore able to increase production. The company is thus well on the way to achieving its delivery target for this year.
Tesla also said it had converted about three quarters of its Bitcoin purchases into another currency. This increased cash by $936 million. Bitcoin’s price plummeted Wednesday night in light of the statement. Tesla shares initially gained around four percent in after-hours trading on Wednesday, but lost a larger part of the gain over the course of the day. Since their all-time high in November of 1243 dollars, the papers have lost around 40 percent. Numerous other companies on the Nasdaq have had to accept similar setbacks.