Tesla Q1 2022 Earnings Report Recap

Tesla beat on earnings and on revenue

Key Takeaways

  • Tesla produced 305,407 vehicles in Q1, a dramatic increase from the year-ago quarter.
  • Higher vehicle production is an indication of increasing demand for Tesla's main source of revenue as well as the company's ability to scale production.
  • Tesla recently opened new manufacturing plants in the U.S. and Germany.
Tesla Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted EPS Beat $3.22 $2.31
Revenue Beat $18.8B $17.9B
Vehicle Production Miss 305,407 311,600

Source: Predictions based on analysts' consensus from Visible Alpha

Tesla (TSLA) Financial Results: Analysis

Tesla, Inc. (TSLA) reported Q1 FY 2022 earnings results that surpassed analysts' expectations. Adjusted earnings per share (EPS) beat estimates, rising 246.2% compared to the year-ago quarter. Revenue also came in above analyst forecasts, rising 80.5% year over year (YOY). Revenue growth was driven by vehicle deliveries, increased average selling prices, and growth in other areas of the company's business. Tesla produced 305,407 vehicles in the quarter, which it reported earlier in the month and which came in below analysts' forecasts.

The company's shares rose more than 4% in extended trading. Over the past year, Tesla's shares have provided a total return of 35.8%, below the S&P 500's total return of 7.9%.

TSLA Vehicle Production

The number of vehicles produced by Tesla rose 69.4% YOY. Tesla's primary business is making electric vehicles, and it needs to continue expanding production in order to grow revenue and profits. The company recently opened new manufacturing plants in the U.S. and Germany. Tesla said that it recently began deliveries of the Model Y from its new factory in Austin, Texas. Production at its new Gigafactory Berlin-Brandenburg began last month.

However, the company has faced numerous challenges due to global supply chain disruptions. Those challenges, which include the global semiconductor shortage, continue to persist. Tesla was even forced to shutter its Shanghai factory in late March due to an outbreak of COVID-19 in the region. The company began preparing to reopen the plant earlier this week. However, the reopening will be under modified conditions where workers will have to live onsite to comply with China's "closed loop management" process for limiting the spread of the coronavirus.

Tesla said that it has made adjustments to its product pricing due to inflationary pressures on its cost structure. However, it has been able to reduce its cost of goods sold (COGS) per vehicle despite the inflationary pressures. That helped to drive its profitability during the quarter.

TSLA Earnings Call Recap

During an earnings call after results were announced, Chief Financial Officer (CFO) Zachary Kirkhorn and Chief Executive Officer (CEO) Elon Musk said the company remains confident that it can increase volume at least 50% compared to 2021 numbers. However, the executives said that Tesla has lost about a month of “build volume” in Shanghai in the wake of shutdowns imposed by China's central government due to the increase in COVID-19 cases. “Production is resuming at limited levels, and we’re working to get back to full production as quickly as possible,” Kirkhorn said.

Tesla's next earnings report (for Q2 FY 2022) is expected to be released on July 25, 2022.

Article Sources
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