Tesla just reported first-quarter earnings for 2022 and beat analysts’ expectations on the top and bottom lines. Here are the key numbers.
According to Tesla's first quarter 2022 financial results, revenue was $18.756 billion, up 81% year-over-year and exceeding analysts' expectations of $17.84 billion; net income was $3.280 billion, compared with $464 million in the same period last year, exceeding analysts' expectations of $2.589 billion.Tesla's share price rose by 5.57% in after-hours trading following this announcement.The company reported revenue of $18.756 billion in the first quarter of 2014, an increase of 81% compared to $17.84 billion in the prior quarter.Revenue growth was driven in part by an increase in the number of cars Tesla delivered. Revenue from the automotive segment totaled $16.861 billion, up 87% compared to $9.002 billion a year earlier.
It is important to note that this data is also not widely expected, as the automotive industry generally announces sales data in advance. Despite ongoing supply chain challenges and factory shutdowns, Tesla reported that it produced over 305,000 vehicles and delivered over 310,000 vehicles in the first quarter.
If we assume that Tesla's average selling price is $50,000, then a conservative estimate of car sales revenue is approximately $15.5 billion. However Tesla's actual Automotive revenue is $16.8 billion, which is primarily due to an increase in Tesla's average selling price (ASP).
Due to significant supply chain price pressure across the industry, Tesla has raised prices across its entire line of electric vehicles. Computer chips are not the only raw material seeing shortages and price increases. Prices for lithium, a key material used in electric vehicle batteries, have increased by more than five times over the past few years. The price of cobalt, another key material for batteries, is also significantly higher than it used to beTesla reported an automotive gross margin of 32.9%, up about 230 basis points from the previous quarter. Total GAAP gross margin was 29.1%. Net profit was $3.318 billion, up 658% year-over-year, exceeding analysts' expectations of $2.589 billion.
Earnings growth was driven by three main factors:
The first is due to the previously mentioned price increase. The increase in average selling prices increased Tesla's overall revenue.
The second is Tesla's increased operational efficiency. Tesla Motors' total operating expenses in the first quarter were $1.857 billion, compared to $1.621 billion in the same period last year and $2.234 billion in the previous quarter.The research and development expenses were $865 million, compared to $666 million a year ago.The selling, general, and administrative expenses were $992 million, a decrease from last year and the previous quarter.Third, revenue from selling carbon credits for vehicles amounted to $679 million, compared to $518 million in the same quarter a year ago and $314 million in the preceding quarter.Carbon credits (regulatory credits) have played a very important role in helping Tesla's revenue and net income to increase significantly.Carbon credits, as the name implies, are carbon credits sold to rival car companies, and Tesla earns revenue by selling zero emission vehicle (ZEV) credits and greenhouse gas emission (GHG) credits to other manufacturers. These manufacturers use the purchased credits to meet market regulations in lieu of building their own electrified or fuel-efficient vehicles.
The investors have been most concerned about Tesla deliveries. Tesla lost about a month of building volume out of factory in Shanghai due to COVID-related shutdowns. On the company’s earnings call, CFO Zachary Kirkhorn and CEO Elon Musk said that Tesla remains confident that it can grow at least 50% over 2021 numbers.Tesla's stock price has been fluctuating over the past few months. The price of the stock is stabilizing around 1000, and the 38.2% retracement of the recent rally at 980 and the 50-day exponential moving average around 970 provide support. Given the current financial performance, it is possible to take advantage of the trend to move up to the 1100 area, the high point of early April.
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