Earnings Preview| Tesla will usher in another record quarterly report?

Tesla is one of the better performing stocks in technology stocks and electric vehicle stocks, the stock has risen 30% in the past few months, 20% in six months, it is worth mentioning that in both time periods, Tesla has outperformed the S&P 500 index.

Tesla will announce its first quarter 2022 results after hours in the U.S. stock market on April 20, 2022.

Investors will focus on its profitability, autonomous driving, new capacity and other related conditions.

About delivery and capacity

On April 2, 2022, Tesla released its first quarter 2022 delivery report, producing 305,000 electric vehicles in the first quarter despite ongoing supply chain challenges and factory shutdowns, with 310,000 deliveries and an annual production of about 1.2 million.

On April 11, the Association released Data on China's Automobile Sales, showing that Tesla's wholesale sales in March were 65,814 units, an increase of 85% year-on-year. In the first quarter of this year, Tesla's cumulative sales exceeded 180,000 vehicles, reaching 182174.

Tesla's Shanghai plant saw month-on-month production growth in March, but only 154 more than in February to 55,462, well below expectations. Among them, as strong domestic demand absorbed most of the production, Tesla exported only 60 cars produced at the Shanghai factory in March.

It is worth mentioning that although Tesla's Shanghai factory was recently shut down due to the epidemic, its Q1 production and delivery exceeded 300,000 vehicles, an increase of nearly 70%. Therefore, in the case of stable growth of existing capacity, the impact of Q2 will not be very large.

In addition, Tesla's Berlin Gigafactory in Germany and the Texas plant in the United States have begun to operate, and after the further release of production capacity, Tesla's sales may continue to rise.

Huaxi Securities expects Tesla's four major plants to reach a production capacity of about 2.3 million units by the end of 2022. By comparison, Tesla delivered 940,000 units for the full year of 2021.

About price increases and profitability

Tesla's 2021Q4 revenue reached $17.719 billion, up 65% year-over-year and up 29% sequentially. Net profit under gaap standards reached $2.321 billion, the best performance ever achieved.

Benefiting from model Y volume and local production cost reductions, Tesla's profitability quality has improved significantly, with a net profit margin of 13.1% in Q4 2021. It was also Tesla's 10th consecutive quarter of profitability.

In the opinion of analysts, Tesla may continue to be profitable this year in Q1. The market expects Tesla's revenue to reach $17.849 billion in the quarter, up 71.8% year-over-year, earnings per share of $2.26, adjusted net profit of $2.59 billion, or 145% year-over-year.

As before, Tesla's production and delivery guidance in 2022 will be the main driver of the stock price.

In addition, Tesla's recent price increase is the focus of the topic, because in the period of rising raw material costs, its only continuous price increase can maintain the level of profits, in March 2022, Tesla has increased prices 3 times in 8 days, with an amplitude of 30,000-40,000 yuan.

In contrast, other new car-making forces are very cautious, which also shows that Tesla has more "pricing power", which is conducive to maintaining its profit level.

About the resumption of work at the Shanghai plant

It is reported that Tesla's Shanghai factory will resume production on April 18. On the same day, Shangguan reporters came to visit outside the Tesla factory.

Through the drone, we saw that there were already employees with luggage inside the factory, and several employees were moving the frame of the Tesla Model3, a small number of vehicles were moving in the factory area, and the factory area was full of Tesla vehicles waiting for delivery. On the road around the factory, the reporter also found a flying bus with a Tesla logo in motion.

According to a Tesla supplier in the Lingang area, they are producing Tesla accessories under closed-loop conditions.

This means that the Gigabit factory with an annual capacity of more than 400,000 vehicles is about to reopen after three weeks of shutdown, and Tesla's capacity loss during the shutdown is roughly estimated to be at least 30,000 units.

Industry analyst Guo Mingxi said on Twitter that compared with the two-shift system of the Shanghai factory, Tesla will adopt a one-shift system after the resumption of work, so the hourly workload will be directly halved, from the previous 80 ~ 85JPH down to 40 ~ 45JPH, according to this calculation, the current parts inventory of the Shanghai factory is only supported for two and a half weeks, and he expects to return to normal as soon as mid-May.

About autonomous driving

According to foreign media reports, Elon Musk revealed in an interview with TED host Chris Anderson that Tesla's FSD beta (Beta) project has more than 100,000 drivers involved. Musk also said that Tesla will achieve full self-driving this year, and this time, he is more confident.

Anderson asked Musk about when Tesla will achieve full self-driving, and Anderson said that by "full self-driving" he means that Tesla cars can drive in most cities without human intervention and are safer than human driving. "Yes, currently my own Tesla vehicle is driving me around Austin most of the time without human intervention." Musk replied, "Our fully autonomous driving test program has more than 100,000 drivers participating. ”

Musk has proposed to achieve full autonomous driving within one to two years, but it has not been achieved. Musk explained that there are "a lot of false dawns" in Tesla's self-driving program, and many times, Tesla thinks it has made real progress, but then progress seems to hit a ceiling and they have to start over. However, Tesla seems to be on the right path for now.