Electric car maker Tesla has made record profits for 2022 despite inflation, price cuts to boost sales and the erratic leadership of company chief Elon Musk.
Most important points:
- Tesla earned $81.5 billion ($115 billion) in revenue in 2022, up 51 percent, while net profit more than doubled to $12.6 billion ($17.7 billion)
- Production rose to 1.36 million cars in 2022 as the company delivered a record 1.31 million vehicles
- It earned $3.7 billion ($5.2 billion) from October to December after quarterly revenue rose 37 percent to $24.3 billion ($34.2 billion)
The company said it posted record sales, operating income and net profit in the last quarter of 2022 thanks to price cuts and cheaper models, results that beat analysts’ forecasts.
That helped drive a record 1.31 million vehicle deliveries last year, though production jumped nearly half to 1.36 million vehicles.
For the whole of 2022, sales increased by half to $81.5 billion ($115 billion), while net income more than doubled to $12.6 billion ($17.7 billion), and operating margins increased nearly 17 percent over the year.
“This margin expansion was achieved through the introduction of lower cost models, built in localized, more efficient factories, vehicle cost reduction and operational leverage,” Tesla said.
The company made $3.7 billion ($5.2 billion) in profit from October to December, nearly two-thirds more than in the December 2021 quarter after quarterly revenue rose 37 percent to $24.3 billion ($34.2 billion). billion).
That came despite delayed vehicle deliveries and COVID-19 shutdowns in China during the last few months of 2022, which squeezed profit margins in the fourth quarter.
On a conference call to discuss the results, a coy Mr. Musk praised the Tesla team for the record results that, he said, came despite “enforced closures, very high interest rates and many supply challenges”.
“It’s been a fantastic year for Tesla, our best year ever,” Musk said. “All of these records faced enormous difficulties.”
The automaker slashed prices in the US and China, its two largest markets, by up to a fifth on some models, with investors and analysts speculating that the move reflected lower demand due to rising interest rates.
Mr. Musk addressed the concerns, saying demand far outstrips production and that Tesla had seen the strongest orders for January so far.
“A huge number of people want to buy a Tesla car but can’t afford it, but these price changes are really making a difference to the average consumer,” he said.
The company expects to sell 1.8 million Tesla cars this year, though Musk went further and confidently predicted that 2 million cars could be sold, despite a likely recession and high inflation.
Some listeners were skeptical of that bullish forecast on Twitter.
Tesla also assured investors that it had a handle on the uncertain economic environment, although it may not have a handle on Mr. Musk.
“As we progress into 2023, we know there are questions about the near-term impact of an uncertain macroeconomic environment and, in particular, with rising interest rates,” the company said.
“The Tesla team is used to challenges given the culture it takes to get the company where it is today.”
The company said it would continue to cut costs and planned to increase production with its Cybertruck model on track to begin production later this year.
Tesla said it would share details about its next-generation vehicle at its investor day in March.
The company is in turmoil over the chaotic takeover of Twitter by CEO Elon Musk.
Tesla’s stock price fell nearly 70 percent last year, with investors accusing the eccentric billionaire of being distracted by its acquisition of Twitter.
Musk, however, defended his use of Twitter to his 127.2 million followers, saying it had helped, not hindered, the Tesla brand.
“My follower count speaks for itself,” he said. “I really encourage companies there, [in] all kinds of ways to make more use of Twitter.”
Tesla investors are also suing Mr Musk for fraud following a 2018 tweet in which he said he had money to take the electric car maker private.
Shareholders claim Mr Musk lied when he sent the tweet, costing investors millions of dollars.
Tesla investors and analysts had eagerly awaited the company’s conference call with Mr. Musk to discuss the results.
“While every quarter is important to Tesla, we want to highlight this upcoming call and accompanying commentary as one of the most important moments in Tesla’s history and for [Mr] Musk himself,” Wedbush Securities analyst Dan Ives said in a note.
“Having experienced unprecedented hypergrowth in the EV market in recent years – which has essentially been created by [Mr] Musk – now Tesla faces a dark macro in 2023, with fierce competition from all angles.”
Tesla’s share price also fell as he sold shares of Tesla to fund his acquisition of Twitter.
Musk’s chaotic takeover saw more than half of Twitter’s workforce laid off, and the billionaire allowed previously banned users — such as anti-Semitic pop star and entrepreneur Kanye West and former US President Donald Trump — back on the platform.