focus
Cash Operating cash flow (free cash flow) for the fourth quarter, net of capital expenditures, was $2.8 billion
Cash and cash equivalents totaled $17.6 billion in the fourth quarter, an increase of $1.5 billion
Profit Fourth Quarter GAAP Operating Profit was $2.6 billion, representing an operating margin of 14.7%
GAAP net income for the fourth quarter was $2.3 billion and non-GAAP net profit (excluding share-based expenses) was $2.9 billion
GAAP Automotive Gross Margin for the Fourth Quarter was 30.6% (29.2% after deducting points revenue)
Operations Exceeded the delivery record of approximately 940,000 units in 2021
The annualized production capacity under efficiency in the fourth quarter of 2021 has exceeded 1.22 million units
summary
2021 was a breakthrough year for Tesla. The market viability and profitability of electric vehicles should no longer be doubted. According to the latest data, Tesla deliveries increased by 87% in 2021, and we achieved the highest quarterly operating margin among all production OEMs, which already shows that electric vehicles have more market prospects than fuel vehicles.
In addition, Tesla generated a net profit of $5.5 billion in GAAP and $5 billion in free cash flow in 2021 — excluding $6.5 billion spent on new plant construction and other capital expenditures.
After the great success of 2021, we will focus on the future. We plan to increase production capacity as quickly as possible, not only from new plants such as Austin and Berlin, but also to existing plants such as Fremont and Shanghai. We believe that the market competitiveness of electric vehicles will be determined by their overall supply chain and production ramping capabilities.
Fully autonomous driving capability (FSD) remains one of our focus areas. Over time, software revenue will contribute to overall profitability to a greater extent. What's more, fully autonomous driving capabilities are an important part of improving car safety, and through the increase in Tesla vehicle usage, it will further accelerate the world's transition to sustainable energy.
2021 will be a defining year for Tesla, but we believe it's just getting started. Thank you for your participation and support.
Financial summary
revenue
Total revenue for the fourth quarter increased 65% year-over-year to $17.7 billion. Revenue growth was primarily driven by the following factors:
+ Increased car delivery
+ Growth in other business segments
profit
Our fourth-quarter operating profit increased to $2.6 billion and our operating margin reached 14.7% compared to the year-ago quarter. Driven by the achievement of the final two operational milestones, this level of profit was achieved after paying $245 million in the fourth quarter to honor the 2018 CEO equity incentive. The increase in operating profit was mainly affected by the following factors:
+ Further reduced cost of cycling
+ Increase in car deliveries
+ Enhancement of profitability of car rental, services and other businesses
-The Company was primarily responsible for an increase in sales management expenses of USD 340 million related to the exercise of 2012 CEO equity incentive options
-Increased raw material, commodity, logistics and expedited costs
- Increased costs for warranty and individual batch vehicle recalls
cash
Cash and cash equivalents continued to increase at the end of the quarter, increasing by $1.5 billion to $17.6 billion in the fourth quarter, primarily driven by $2.8 billion in free cash flow, partially offset by $1.5 billion in debt and financial lease repayments. Excluding automotive and energy product financing, our total debt fell to $1.4 billion at the end of 2021.
Operational Summary (Unaudited)
Vehicle productivity
In the fourth quarter, Tesla continued to face the continuation of global supply chain, logistics, labor and other manufacturing challenges that limited the full production operation of our factories.
Usa: California, Texas
At the end of 2021, the Texas Gigafactory began production of the Model Y. After the Model Y, manufactured at the Austin facility, completed the full certification process, we plan to begin delivering to customers.
The Fremont plant will produce record-breaking production in 2021. We believe that annual production is expected to exceed 600,000 units. Our goal is to maximize the capacity of our Fremont facility while expanding our new facility.
China: Shanghai
In 2021, the production of Model 3 and Model Y continues to climb. Local production is essential to reduce the cost of bicycles and improve the stability of global supply chains. The Shanghai Gigafactory remains our main export center.
Europe: Berlin-Brandenburg
The Berlin Gigafactory has started testing of equipment in the vehicle production process at the end of 2021. After obtaining a manufacturing license from the local authority, we will start delivering German-made vehicles in Europe. The first cars will use 2170 batteries.
Core technology
Autonomous Assisted Driving & Fully Autonomous Driving Capability (FSD)
Our team continues to update the beta software that iterates on full autonomous driving capability (FSD), releasing a total of seven updates. We successfully increased the number of U.S. software test vehicles from a few thousand in the third quarter to nearly 60,000 today. Model 3 and Model Y, which use a purely visual auto-assisted driving program, received the highest safety rating in the Institute for Highway Safety Insurance (IIHS) crash test and received a single score of "Excellent" for collision avoidance.
Vehicle software
In the fourth quarter, we released a new user interface with a customized application launcher, simplified control menus, and support for night mode. It also includes real-time image of the car's blind spots when the car's turn signal is lit, editable navigation passpoints, and a range of new gaming, entertainment, and audio features. Early in the quarter, we also developed live images of the car's camera when Sentinel mode was activated in the app.
Batteries, powertrain and manufacturing
Manufacturing is Tesla's core competitiveness. Due to battery cost considerations, electric vehicles used to be considered to have poor overall profitability. We strongly believe that cost issues can be further addressed through the production of innovative, well-planned products and factories. In the third quarter of 2021 (the most recently widely reported quarter), Tesla surpassed all mass-produced automakers, generating the highest operating margins. In the third and fourth quarters of 2021, the cost of cycling has fallen to around $36,000. We believe that the current inclusion of large castings, structural battery packs, 4680 batteries and many more will help us continue to reduce product costs.
Other highlights
Energy storage
Driven by the strong energy storage product Megapack, our installed energy storage products in 2021 increased by 32% year-on-year. As market demand continues to outpace capacity, the growth of the energy storage business has been constrained by supply. We are currently building a factory dedicated to the production of Megapack products to meet the growing market demand.
Solar retrofits and solar roofs
Solar installed capacity will grow to 345MW (MW) in 2021, up 68% year-on-year, with almost all solar products purchased using cash or loans. Solar roof installations nearly tripled year-over-year in 2021 and continued to grow in the fourth quarter. We are further optimizing costs, especially installation costs, to improve the profitability of our energy products.
Services and others
In 2021, gross margin in the Services and Other segments improved to -2.7%, the best performance in five years, and broke even in the fourth quarter of 2021. Used car sales remain strong in 2021, while profits from other businesses such as service, boutique and accessories sales have also improved.
prospect
yield
We plan to increase production capacity as soon as possible. Vehicle delivery is expected to grow at an average annual rate of 50% in the coming years. The specific growth rate depends mainly on the capacity of our equipment, the efficiency of our operations, and the capacity and stability of our supply chain. With supply chains becoming a major limiting factory, our plants have been operating below capacity for several consecutive quarters, and this is likely to continue in 2022.
Cash flow
We have sufficient liquidity to support product planning, long-term capacity expansion plans, and other expenses.
We will continue to innovate to reduce manufacturing and operating costs, and over time we expect software-related margins to accelerate as hardware-related profits grow."
products
The ramp-up pace of production at the Austin and Berlin plants will be affected by the successful introduction of many new products and manufacturing technologies in new locations, ongoing supply chain challenges, and local licensing. We have also made progress in industrial production of Cyberteruck and are currently planning to start production at the Austin plant after the Model Y model.
Fremont Plant – 2021 breaks production record
The Berlin Gigafactory – Graffiti
Giberufactory Berlin – quality control
The Berlin Gigafactory – a bodybuilding workshop
The Berlin Gigafactory – the final assembly workshop
Texas Gigafactory – Exterior
Texas Gigafactory – Final Assembly Workshop
Texas Gigafactory – Painting Workshop
Texas Gigafactory – Connecting seats to structural battery packs
Shanghai Gigafactory - Exterior View
Shanghai Super Factory - Final Assembly Workshop
Tesla Semi
Cumulative profitability since inception
(Unaudited)
Net profit attributable to general shareholders (loss) (in billions of US dollars)
Retained earnings (cumulative loss) (in billions of US dollars)
Track quarterly key metrics – quarterly
Vehicle deliveries (in millions)
Operating Cash Flow (IN$ billion)
Free cash flow (in billions of DOLLARs)
Net Profit (in billions of DOLLARs)
Adjusted EBITDA (in billions)
Track quarterly key metrics – the last 12 months