Elon Musk's high-flying electric vehicle company notched a
new record in quarterly profits of $3.3 billion following the unveiling of new
factories in Germany and the US state of Texas that have begun commercial
deliveries. The results also should trigger $23 billion in new payouts to CEO
Elon Musk, already the world's richest man.
Musk during the earnings call said Tesla expects to mass
produce a robotaxi with no steering wheel or pedal by 2024.
Headwinds facing the company include increasing raw material
costs, as well as a weeks-long outage at the Shanghai plant following the
Chinese government's latest COVID-19 restrictions.
"Our own factories have been running below capacity for
several quarters as supply chain became the main limiting factor, which is
likely to continue through the rest of 2022," Tesla said in its earnings
press release.
Still Musk said it "seems likely" the company will
produce more than one and a half million vehicles in 2022, which would be above
the company's long-term target of at least 50 percent output growth.
Twitter Not Eager to Be Ruled by Billionaire Elon Musk,
Analysts Say
"We are growing very rapidly year over year and remain
confident of exceeding 50 percent growth fore forseeable future," Musk
said on the conference call with investors and analysts. "The future is
very exciting."
Investors also worry about Musk being distracted by his
Twitter bid at a time when Tesla is ramping up production at new factories in
Berlin and Texas.
"Factory ramps take time, and Gigafactory Austin and
Gigafactory Berlin-Brandenburg will be no different," Tesla said in a
statement.
The new factories will be key to meeting demand and reducing
reliance on its China factory, its biggest one, which is recovering from a
plant shutdown.
The Model 3 Tesla currently lists for a starting price of
$42,690, putting it beyond reach for many households.
Musk, who has long spoken of the need to make electric
vehicles affordable for the masses to combat climate change, insisted "we
absolutely want to make EVs as affordable as possible."
"It's been very difficult when inflation is at a 40-or
50-year high" said Musk, who noted how suppliers have sought 20 to 30
percent price increases for parts.
Struggle for affordability
For the latest quarter, Tesla reported profits of $3.3
billion, up 658 percent from the year-ago period on an 81 percent jump in
revenues to $18.8 billion.
The company produced 305,407 autos in the period, slightly
below the level in the prior quarter, but enough to push output above one
million over the last 12 months.
Chief Financial Officer Zach Kirkhorn said Tesla's Shanghai
plant "lost about a month of built volume" due to the lockdown, but
that manufacturing "is resuming at limited levels working to get back to
full production as quickly as possible."
Kirkhorn said cost inflation on raw materials had
accelerated during the first quarter, and second-quarter costs are trending
"slightly higher" than that.
As supply chain problems have persisted, auto analysts have
cautioned that the EV build-out could be constrained by limited raw materials.
ISeeCars analyst Karl Brauer cited rising costs for lithium,
palladium and nickel as a challenge for Tesla and the auto industry more
generally.
"Cost and supply concerns around various battery
components isn't going away, and will likely grow as global EV production and
demand grows," Brauer said.
"Electric vehicles have always struggled to be as cost
effective as internal combustion cars. And there's every indication that
struggle will continue."
Musk acknowledged some of these challenges for EVs, calling
for entrepreneurs to focus on building lithium supply.
Musk said lithium is responsible for cost increases and
"a limiting factor" to EV growth.
He encouraged companies to get into the lithium business,
which he said would generate high margins thanks to high prices.
"Can more people please get into the lithium
business?" Musk quipped. "The lithium margins right now are practically
software margins....Do you like minting money? Well, the lithium business is
for you."
He also said Tesla will have "some exciting
announcements in the months to come" regarding securing raw materials for
batteries.
Musk said its own 4,680 battery cells would become a risk to
production next year if it does not solve volume production by early 2023.
"But we're highly confident of doing so." He also said as a risk
mitigation, it will also use its existing, 2,170 batteries for vehicles being made
in Texas.
The results are the latest in a series of strong earnings
that has brought glory to Musk, who has most recently launched an unsolicited
bid to acquire Twitter.
The social media platform is fighting the effort, unveiling
a "poison pill" plan that would make it harder for the billionaire to
get a controlling stake. The matter did not come up during the Tesla conference
call.
0 comments:
Post a Comment