Tesla presents record figures – the Shanghai lockdown is a burden

new York He can’t help himself: Tesla boss Elon Musk had actually announced last July that he wanted to stay away from the presentation of the quarterly figures and the analysts’ conference in the future – unless “there is something really important.” But both in January and on Wednesday evening the CEO was there.

Perhaps Musk, who had mainly produced negative headlines in the past few days as a result of his intended Twitter takeover, wanted to come up with positive news again. Because there was enough of that during the presentation of the quarterly figures.

The results were significantly better than expected on Wall Street: the analysts had forecast sales of $17.6 billion on average. The stock rose more than 5 percent in after-hours trading. “Q1 was a record quarter on many levels,” Musk said. “We achieved record deliveries and an operating return of 19 percent. And that despite chip difficulties, logistics problems and other obstacles.”

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Like the entire automotive industry, Tesla suffers from persistent supply bottlenecks, especially with computer chips. Customers sometimes wait more than half a year for their vehicle. Tesla also said on Wednesday that some deliveries are likely to be postponed to 2023. Nevertheless, the group increased its deliveries by 68 percent to 310,048 cars compared to the first quarter of 2021.

Tesla wants to grow by 50 percent annually – Musk hopes for 60 percent

CFO Zach Kirkhorn said the company is aiming for 50 percent annual growth in 2022 and beyond. Maybe even 60 percent is possible, Musk added. “In the past few weeks we have opened Giga Berlin and Texas, two fantastic factories,” said the CEO. Their output is still small, as with all new works, but it is growing exponentially. By the end of the year, they want to have increased the volume in both Berlin and Texas.

Tesla factory

The output in the new Austin factory is still small, but it is growing exponentially, says Musk.

(Photo: IMAGO/ZUMA Wire)

Praise came from Laura Hoy, an analyst at wealth manager Hargreaves Lansdown: “Deliveries and production always come first at Tesla,” she wrote. The more cars Tesla produces, the cheaper the one-off will be for the group. In conjunction with increased prices, this ensures a higher profit. “That’s the textbook definition of economies of scale, and Elon Musk has brought it to life before our eyes over the past year.”

However, according to Hoy, the group is already highly valued today. Further price increases are all the more difficult. And: “The market has no problem sending shares into free fall when unforeseen challenges arise,” she says. “Musk’s impulsive behavior is not helpful in this regard.” There would also be headwinds from inflation and the ongoing shortage of chips as stress factors.

Lockdown in Shanghai costs Tesla 40,000 vehicles

The many global problems then also played a major role in the analyst call. Musk expressly thanked his suppliers and the employees of the plant in China: “Our team in the Tesla factory in Shanghai in particular had major problems due to the Covid outbreak. Still, they managed to get the factory back up and running.”

However, production in China is currently only running at a significantly reduced capacity. Musk acknowledged that production could fall slightly in the second quarter due to the lockdown in Shanghai: “We lost a lot of working days in production.” But the factory is now being put back into operation “with a vengeance”. According to estimates, production of around 40,000 vehicles has been lost since the factory was closed by the Chinese authorities at the end of March.

Whether Tesla can meet its own production targets depends on many factors that the company cannot control. Musk was still optimistic. He is confident of producing 1.5 million cars in 2022, after almost a million last year.

>> Read here: Disenchanted Europe: Why investors are turning back to the US

Auto expert Alyssa Altman from the consulting firm Publicis Sapient confirms Musk’s optimism: “With the two recently opened gigafactories in Grünheide near Berlin and Austin, the company seems to be well positioned to compensate for the reduced production capacities in the Far East caused by the Shanghai lockdown.”

Due to the ambitious production targets, Tesla also needs large amounts of raw materials, especially for battery production. “We are looking very closely at how we can secure the necessary supply of raw materials,” Musk explained. This is “a limiting factor.”

Musk admits autopilot issues for the first time

For the first time, Musk also acknowledged problems with one of the group’s most important future projects: the autopilot, which Tesla sells to its customers as a “full self-driving” function for an additional $12,000. Contrary to their own designation, Teslas with an autopilot system have not yet been able to drive independently. Elon Musk had repeatedly announced in the past that the system would be fully activated by the end of 2022.

But after several fatal accidents, the US road traffic regulator NHTSA is currently intensively reviewing Tesla’s autopilot approach. Because unlike most other car manufacturers, Tesla relies exclusively on optical cameras in connection with artificial intelligence for the technology, which is intended to make additional radar and laser sensors for the precise detection of the environment superfluous. However, most industry experts still consider systems with additional sensors to be more secure.

The progress of the Tesla autopilot is taking longer than expected, Elon Musk has now admitted. In the many technological developments with his participation, he has “never seen so many mistaken developments where it looks like we’re going to make a breakthrough, but then don’t do it.”

Musk did not announce any new products on Wednesday. Musk also held back with details about the robotaxi planned in Texas – a fully autonomous driving service whose cars should no longer have steering wheels or pedals. “This is going to be a very strong product that we aim to get into volume production in 2024,” he said. This will be a big driver of Tesla growth. The same applies to the humanoid robot Optimus, according to the brief explanation when asked.

The hottest topic of the past few days was not an issue on Wednesday evening: Musk’s offer to buy Twitter. It had weighed on the stock price, and many observers were concerned that Musk would be overwhelmed with running another company alongside Tesla and space company SpaceX.

But the bank analysts present didn’t ask, politely thanked Musk for the rest of his answers. As usual at Tesla, press questions were not permitted.

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