In the first quarter of the new year, Tesla once again handed in a brilliant answer.
Text | Peng Suping
On April 21, Beijing time, Tesla released the first quarter of fiscal 2022. According to the data, Tesla achieved operating income of $18.756 billion in the quarter, a sharp increase of 81% year-on-year, and net profit attributable to common shareholders was $3.318 billion, a substantial increase of 658% year-on-year.
Even in the new energy vehicle track, which has a generally good start in the new year, Tesla's performance is also a good ride. In the case of global sales in the first quarter that has been announced before, Tesla's revenue, gross margin, expenses, attributable net profit and other indicators have exceeded market expectations across the board.
In the past year, Tesla has frequently raised the price of its products in China, the United States and other markets, and this report card with few weaknesses shows that Tesla's price increase has not inhibited demand, but directly led to a substantial increase in revenue and gross profit, and to a certain extent, it has also strengthened the company's strong voice and high profitability image as a leading new energy vehicle company.
After the earnings report, Tesla's after-hours stock price rose more than 6%, re-rushing to the trillion-dollar market value.
The "cost control + price increase strategy" outperformed the market
According to the previously released sales data, in the first quarter of 2022, Tesla delivered more than 310,000 new vehicles, basically the same as the fourth quarter of last year, but an increase of 68% year-on-year. According to this, the market estimates that Tesla's operating income in the first quarter of this year will reach $17.8 billion, an increase of 71% year-on-year, and the net profit attributable to the mother will be $2.1 billion, an increase of 380% year-on-year.
However, Tesla's final financial report far exceeded this expectation, the actual revenue was 5% higher than the estimated revenue, the actual attributable net profit was 58% higher than the estimated, and the attributable net profit even achieved a substantial increase of 658% year-on-year.
Tesla is not only the first new energy vehicle company in the industry to achieve continuous profitability, but also further consolidates its first-mover advantage.
How many positions does Tesla have ahead of its peers? Weilai, Xiaopeng, ideal as Tesla's followers, the gap is certainly quite large, but also started earlier BYD, now the annual sales level of new energy vehicles has exceeded 600,000 vehicles, but the gross profit margin of the automobile business is still less than 20%, and Tesla has long become one of the car companies with the highest gross profit margin in the automobile business - since the third quarter of last year, Tesla's automobile business gross profit margin has exceeded 30%, and the fourth quarter continues to maintain this level, and in the first quarter of this year, it has reached 32.9%.
Of course, BYD's automobile business covers the whole vehicle and battery, and its new car batteries all come from self-supply, the two can not be simply directly compared, and since last year, the price of battery raw materials has risen significantly, and BYD has obviously borne part of the pressure of price increases.
In comparison, Tesla's pace is much lighter. Despite the same rising raw material prices, it does not appear to have been fully reflected in the first quarter.
There are two reasons for this. On the one hand, as Tesla CFO Zach Kirkhorn said at the first-quarter earnings conference, although the raw materials and total costs have increased in the past few months, these changes will not have a direct and immediate impact, because Tesla has signed contracts with suppliers, implying that at least some parts are delivered at previous prices.
On the other hand, Tesla's product prices have increased significantly, which has largely hedged the price of raw materials and other costs. This can be seen from the data, tesla deliveries in the first quarter rose by 68% year-on-year, and the operating income of automobiles reached 16.86 billion US dollars, an increase of 87% year-on-year.
It should be pointed out that although Tesla has frequently raised prices since the end of last year, this part of the price increase has not yet been reflected in the first quarter of the financial report, because Tesla's new car delivery cycle is as long as several months, and the bicycle price increase is related to last year's price adjustment. In fact, since November last year, Tesla has begun a wave of price adjustments, taking the Chinese market as an example, in the last two months of 2021, Tesla's main model Model 3 and Model Y rear-drive version were adjusted three times and twice, and the overall increase was as high as 29,800 yuan and 25,800 yuan, respectively.
Tesla's excellent gross vehicle gross margin and properly controlled expenses make its net profit performance more outstanding.
According to the financial report, in the first quarter, the vehicle delivery volume and operating income increased by 70% or 80% year-on-year, and the overall cost was only 1.857 billion yuan, an increase of only 14% year-on-year, and even achieved a decline - in the fourth quarter of last year, Tesla's overall expenses could reach 2.234 billion US dollars.
But even so, the 658% attributable net profit growth is still slightly exaggerated.
Here it must be pointed out that the above-mentioned attributable net profit adopts the GAAP (Us General Accounting Standards) caliber, and the share payment fee is accounted for under the GAAP standard, and the net profit amount is smaller, but its influencing factor is also an additional share payment fee.
The statement shows that share-based expenses in the first quarter of this year were $418 million, down 32% from $614 million in the same period last year, which led to a more pronounced increase in the amount of net profit attributable to gaap.
Excluding share-based payments, Tesla's non-GAAP-based near-attributable profit for the quarter was $3.736 billion, up 255% year-over-year — still a very substantial increase, but not as staggering as 6 times. In fact, the increase in attributable net profit under the influence of share-based expenses is extremely high, and it has also appeared before, taking the fourth quarter data of last year as an example, tesla's net profit attributable to the mother under GAAP was $2.321 billion, a sharp increase of 760% year-on-year.
Will "capacity constraints + supply chain pressure" be constrained?
Tesla seems to be unable to sell. At the first quarter earnings meeting, Tesla CEO Elon Musk inadvertently "Versailles" a bit: "Our car purchase list is very long, and the list of some models has even reached next year." ”
In the first quarter earnings report, Tesla secretly showed off a vehicle order for the US market, and one of the obvious turning points was February 14, the day the 56th Super Bowl (rugby event) in the United States opened, and Tesla's order volume increased sharply.
What does the Super Bowl have to do with Tesla? Tesla, which claims to never advertise, naturally does not sponsor the Super Bowl, but this year the Super Bowl welcomed a number of electric vehicle customers, who launched a positive publicity at this nationally watched event - but Tesla, which stayed out of the matter, actually ushered in more orders.
In this chart, Tesla may be intended to show that tesla will still be a significant beneficiary as more brands join the ranks of electric vehicles.
Auto analyst Zhang Xiang told the think tank Jun that Tesla's advantage is to start early, have rich international experience, and have a "net red" boss who will create momentum, these advantages are basically ahead of other brands, but from the perspective of future sales performance, bydir, Volkswagen and other traditional car companies have also emerged, Tesla may not always be in the first position.
However, Musk obviously does not see it that way. He has repeatedly said that Tesla's challenge is not in demand, but in production capacity. Therefore, in almost every earnings report or every public statement of executives, expanding production capacity is a top priority.
In the past month, Musk has expanded Tesla's production base as never before: the Berlin plant in Germany went into operation in March and the Plant in Texas in the United States was completed in April. According to the paper plan, Tesla's global production capacity has reached 2 million vehicles — more than twice as much as last year's completed production.
However, Tesla is still difficult to reach this level of mass production this year. The best expectation given by the optimistic Musk is that Tesla production is expected to exceed 1.5 million units this year.
At present, Tesla's Berlin factory and Texas factory will focus on the production of Model Y-type, from the production of small parts to large-scale mass production, a gigafactory takes about 9-12 months of climbing period. "We hope that Tesla can do better and better in the future, but it will take a while to achieve a weekly production of 5,000 units per week." Musk said.
With a large amount of production capacity already planned, tesla's output in the future has been guaranteed.
However, in the short term, Tesla's production still faces many uncertainties. For example, due to the epidemic prevention work, Tesla's Shanghai factory has stopped production for as many as three weeks since the end of March, and the output of nearly 30,000 vehicles has been delayed according to the annual production capacity of 500,000 vehicles. The Shanghai factory has become Tesla's most important production base, delivering a total of 484,000 vehicles in 2021, accounting for 51.7% of Tesla's total global deliveries.
Fortunately, the plant resumed work and production on April 19. Musk said that weekly production at the Shanghai plant will hit a record this quarter, and given the suspension of production for several weeks, production in the second quarter may be flat with the first quarter, or slightly lower than the first quarter. "Of course, no one can guarantee the final result, maybe we can create a miracle, and the output in the second quarter may be higher than in the first quarter." Musk gave a more optimistic estimate.
The resumption of work and production in the context of the fight against the epidemic is not easy. On the one hand, it is difficult to put all the personnel in place, which will more or less affect the rhythm of production. On the other hand, the situation in the upstream supply chain is also constraining the ability to further produce. Although Tesla China said that the Shanghai factory will reach a single shift full production within this week, this is based on the fact that its parts inventory can still meet the week's production.
The smooth progress of mass production depends on a stable supply chain. At present, the automotive supply chain is still facing no small challenge, and many supply chain enterprises have stopped work and production, which to a large extent restricts the production of downstream OEMs.
At present, a number of Tesla parts suppliers in Shanghai have begun to resume work, but the supply of other suppliers in the Yangtze River Delta region needs to be further promoted. It is said that Tesla suppliers located in Zhejiang Province are also actively linking under the guidance of the government, ensuring production, and opening up logistics to support Tesla vehicle manufacturing; suppliers in Jiangsu Province are still in a state of shutdown, and transportation is more difficult, and the Ministry of Industry and Information Technology, Jiangsu Province, Suzhou Municipal relevant departments are also actively coordinating supply chain recovery work.
In addition to the factors of suspension of work and production, the shortage of chips and the rise in raw material prices in the automotive industry chain since last year have not been well solved, and the start and production of global car companies is not smooth, and Tesla is no exception. From this perspective, Musk's goal of producing 1.5 million vehicles per year may be really too optimistic.