Tesla released its financial results for the third quarter of 2022, and analysts and shareholders did not like them. The company’s shares fell by more than 6% in the last session, and this year they have already fallen by about 50%. This is the beginning of the giant’s problems.
Tesla sold fewer cars
Tesla announced its car sales a few weeks ago in early October, but analysts were surprised by the financial results. Revenues should have been almost 22 billion dollars, while they were 500 million dollars less and amounted to exactly 21.45 billion dollars. This is largely due to the strengthening of the US dollar, due to the significant strengthening against other currencies, Tesla estimates its losses at about 250 million US dollars. Therefore, it can be expected that the prices of cars, including those expressed in PLN, will rise soon. Similar steps are taken by other American companies, which have most of their sales outside the country.
Back to Tesla, however, net profit came in at $3.65 billion, slightly less than the record for the first quarter of 2022. When it comes to making money, Tesla has been doing very well in recent months and boasts a steadily growing margin that is already higher than the average for companies in the auto industry. During the results conference, Elon Musk repeatedly emphasized that his company is on the right track, and the results should not be affected even by the recession, because the demand for electric cars is constantly growing. Despite this, the company is constantly looking for savings and intends, among other things, to abandon mass deliveries of cars at the end of the quarter, as it significantly increases transportation costs.
In return, Tesla wants to deliver its cars to customers evenly throughout the quarter, with no temporary breaks in the final weeks of each quarter. Increased costs for materials and production at new factories near Berlin and Texas also pose a risk to costs. However, great progress has been made in recent weeks and according to the report, the estimated production capacity of these plants is now around 250,000 vehicles per year. For comparison, let’s note that the Shanghai factory is already able to produce more than 750 thousand cars annually. By the end of the year, Tesla’s production capacity should exceed 2 million vehicles per year, although this year’s output will be significantly lower and may not meet the promised 50% increase in sales.
What does the future hold for Tesla?
According to statements that we can read in the letter to shareholders, Tesla has no intention of slowing down and wants to maintain sales growth of 50% per year for many years, which will mean significant sales growth in the coming years and the construction of new factories. Currently, the company’s financial position is very good, margins are at an adequate level, and modern production technologies, such as simplification of the creation of body elements thanks to large presses, keep costs down. Tesla is currently mainly investing in the development of the new 4,680 batteries for the Austin-made Model Y and in preparation for the production of the Cybertruck. The first semi-tractor units will be delivered to customers in December this year. Therefore, the potential for growth is certainly there, and the biggest threat to the company is the availability and prices of materials used in the manufacture of batteries.