Tesla Inc posted a better-than-expected quarterly profit in a sign of strength as it faces growing consumer skepticism about demand for its lineup of all-electric vehicles.
The Austin, Texas-based company reported adjusted earnings of $1.19 a share, ahead of analysts’ average of $1.12 per share compiled by Bloomberg.
The electric vehicle market leader said it would ramp up production “as soon as possible” — in line with its previous multiyear guidance of an average annual growth rate of 50 percent — and said it was on track to deliver about 1.8 million vehicles this year.
But it also left itself some leeway, noting that it could grow faster or slower in some years, depending on a number of unspecified factors.
The stock was little changed in extended trading in New York, erasing most of its earlier gains.
Read more: Tesla invests $3.6 billion in Nevada battery and truck capacity
The company warned of an uncertain economic environment, especially with rising interest rates.
“In the near term, we are accelerating our cost reduction roadmap and driving higher productivity, while remaining focused on executing the next phase of our roadmap,” it said in a statement to shareholders.
The automaker has become a global leader in the auto market as its deliveries grow and a large portion of the industry shifts to making battery-powered vehicles. It now has four auto plants on three continents, including its newest in Austin. The company said its factories have the capacity to produce more than 1.9 million vehicles a year.
Tesla confirmed that it is still on track to start building the long-awaited Cybertruck in Austin later this year. It will discuss more details of its next-generation vehicle platform at its investor day on March 1.
In a Twitter Spaces conversation last month, CEO Elon Musk predicted a deep recession and warned consumers would cut back on big-ticket purchases. Tesla then slashed prices across its lineup this month.
Tesla’s fourth-quarter revenue of $24.3 billion was slightly higher than market expectations. Auto gross margins, however, came in at 25.9 percent, below analysts’ average estimate of 28.4 percent — a sign investors may be concerned after the latest round of price cuts. In the same period last year, the automobile gross profit margin was 30.6%.
Revenue from sales of regulatory credits that other automakers use to offset greenhouse gas emissions reached $467 million, up from $286 million in the previous quarter and $314 million a year ago. Tesla has said it expects such revenue to shrink over time as rivals roll out more electric vehicles to comply with emissions regulations and meet rising demand.
Musk is expected to join the company’s conference call later Wednesday, his first meeting with analysts since the $44 billion acquisition of Twitter Inc. in late October. His move to partially fund the acquisition by selling Tesla shares weighed on the stock, which has fallen 53% in the past 12 months.
First published date: Jan 26, 2023 at 08:19 AM CST
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