This week, the super earnings season of tech companies kicked off again. After yesterday's hours, after Netflix took the lead in releasing a dismal financial report that plunged by nearly 30%, technology stocks undoubtedly fell into a collective panic, and today's US stock market opened, almost all major technology companies fell first, as if the tragedy led by Netflix in the last quarter was about to repeat itself.
But in the midst of a gloomy cloud, Tesla, which released its earnings report today, has stabilized its position and re-injected some confidence into the market with a performance that exceeded expectations in the case that the supply chain crisis has not been eliminated.
According to Tesla's after-hours earnings report released today, in the first quarter of this year, Tesla achieved revenue of $18.76 billion, an increase of 81% year-on-year, exceeding market expectations of $17.78 billion; net profit of $3.318 billion, the market expected $2.156 billion; earnings per share of $3.22, the market expected $2.26.
All financial indicators are much higher than market expectations, which also allows Tesla's stock price, which was originally down nearly 5% today, to rise sharply after hours, rising by more than 6.6% at one point, regaining the trillion-dollar market capitalization throne.
Image taken from Robinhood
In this regard, many netizens joked that this result is not surprising, from Musk's action of buying Twitter a few days ago and publicizing that he is not bad money, it can be seen that Tesla's financial report this time will not be bad.
The price increase strategy outperformed inflation, and profits hit new highs again
From the financial data of recent quarters, it can be seen that Tesla's development pace is generally very stable and has entered a relatively stable state. Since the first quarter of 2021, despite the challenge of supply chain shortages caused by the epidemic, Tesla has achieved quarter-on-quarter growth in revenue and profit for five consecutive quarters, constantly refreshing the historical record.
However, it is worth noting that Tesla's large increase in revenue and profit is also related to the continuous price adjustment strategy recently implemented. In the past year, Tesla Model 3 and Model Y have adjusted prices more than ten times in a row, and the average price has increased by more than 20%. Compared with other big car manufacturers, Tesla, which is "not worried about selling", seems to be able to transfer the cost pressure to consumers more directly.
Judging from the financial report data, the effect of the implementation of the price increase strategy is indeed very significant. Tesla vehicles were 32.9 percent in the quarter, and pretax profit per vehicle increased more than 60 percent to $16,203 compared to the same period last year.
Tesla's quarterly profit growth, image from Barron's
In addition to the higher car prices, it is unexpected that in the context of soaring raw material prices, Tesla's production cost per car in this quarter has declined compared with the previous quarter. According to the analysis, there may be two reasons behind this, one is that Tesla signed a long-term contract, and when the spot price is higher, the impact of rising costs is delayed. Second, about half of the cars Tesla shipped in the first quarter contained iron phosphate or LFP batteries, which are lithium-ion batteries and do not contain the more expensive cobalt or nickel. Therefore, whether the cost of building a car can continue to remain low still needs to be a question mark.
In the energy business, Tesla's solar deployment fell by nearly half in the first quarter of 2022 compared to the same period last year, mainly due to delays in imports of certain modules. But lithium-ion battery energy storage systems increased by 90% from the same period last year, but down from the previous quarter.
In addition, Musk has also buried some future growth points worth looking forward to this time. First, he said Tesla is continuing to develop a suite of advanced driver assistance systems for fully autonomous driving, aiming to launch it by the end of this year, and encourages consumers to subscribe to the service.
In addition, Musk pointed out that Tesla has begun to develop a fully autonomous taxi without steering wheels and pedals since the beginning of April this year, with the goal of achieving mass production in 2024. He also said that next year Tesla will hold a special self-driving taxi event to promote the new model.
Deliveries barely withstood the pressure, and supply chain problems remain acute
Although Tesla's performance exceeded expectations this time, it still faces the challenge of supply chain shortages. In terms of actual vehicle deliveries, Tesla delivered 295324 Model 3 and Model Y, as well as 14,724 Model S and Model X, in the quarter. Overall deliveries increased 68% year-over-year from shipments in the first quarter of 2021, but only slightly increased compared to the previous quarter and barely flat.
Tesla's vehicle deliveries in recent quarters, image from The Verge
Due to the impact of the new crown epidemic, Tesla's Shanghai factory has been shut down for several weeks, which has affected deliveries. But a positive signal is that this quarter Tesla's two factories in Berlin, Germany and Austin, Texas, officially opened on March 22 and April 8, respectively, according to Tesla's news, the Berlin and Austin plants are currently mainly responsible for the production of Model Y models, in addition to the Texas plant will start to produce the long-awaited electric pickup Cybertruck in 2023.
At the shareholder meeting, Musk made it clear that in the case of shortages of components and semiconductor chips, Tesla factories have been undercapacitated for several consecutive quarters, and this expectation will continue for another year. "If consumers order cars now, they may need to be prepared to wait a year."
In addition to the financial reports, Tesla's lace events this quarter also emerged. In February, the National Highway Traffic Safety Administration said complaints about Tesla's "ghost brakes" had surged over the past nine months, and China had investigated flaws in Tesla's software controls, leading to a massive recall of Tesla vehicles in China and the United States in the first quarter.
At the company level, Tesla was sued by California civil rights agencies after several employees reported racial discrimination and harassment this quarter. Of course, the news that Musk is going to buy Twitter also worries shareholders. On the one hand, shareholders are worried that Musk will sell Tesla shares on a large scale in order to raise acquisition funds, on the other hand, everyone is also worried that Musk will start to "not do business" and be distracted from Tesla once he acquires Twitter. After all, in Tesla's current management, there is no number two person to hand in addition to Musk.
But so far, Musk has not made too many statements about the acquisition of Twitter at the shareholders' meeting. But with Tesla's steady progress and the rise in stock prices, Musk is undoubtedly a little more confident in buying Twitter.