To The Moon

Tesla announced that it will release its Q1, 2022 earnings report after the closing bell on Wednesday, April 20. 

Tesla Expected to Post $16.44b Sales for Q1

Equities research analysts expect Tesla to report sales of $16.44 billion for the current fiscal quarter. In the same quarter last year, Tesla reported sales of $10.39 billion, indicating a year-over-year growth rate of 58.2%.

As per Zacks, analysts expect Tesla to report full-year sales of $81.48 billion for the current year, with estimates ranging from $64.37 billion to $93.30 billion. Zacks’ sales averages are mean averages based on a survey of sell-side Tesla analysts. For the following fiscal year, analysts expect Tesla to report sales of $107.43 billion with estimates ranging from $81.28 billion to $134.93 billion.

Tesla Achieves Delivery Record in Q1 of 2022

Tesla share price was boosted earlier this week by its Saturday press release. The world’s largest EV manufacturer confirmed it had delivered 310,048 vehicles, 68% more than the 184,800 it delivered in Q1 2021.

CEO Elon Musk tweeted ‘this was an exceptionally difficult quarter due to supply chain interruptions…outstanding work by Tesla team and key suppliers saved the day.’

Despite another quarterly record, it still delivered 7,000 fewer cars than previously forecast.

In January, the CEO said he expected sales to grow by 50% in 2022. And with Brent Crude remaining at a multi-year high, the steep up-front cost of EVs now compares more favourably to the rising prices of petrol and gas.

Moreover, Tesla is planning another stock split later this year, which historically has seen its share price rise.

So with deliveries confirmed, investors are likely to concentrate on some of the finer detail.

Supply Chain Will Continue to Be the Fundamental Limiter

Global supply chains have felt the strain since the covid-19 pandemic began. However, Tesla is now facing further constraints on two fronts. The Russia-Ukraine war is seeing a squeeze on EV-critical metals including Palladium, Nickel, and Platinum, which are now trading at near-record highs.

Tesla raised its US prices twice in one week last month in response. Musk has previously warned that ‘in 2022, supply chain will continue to be the fundamental limiter of output across all factories. So, the chip shortage, while better than last year, is still an issue.’

Tesla’s Shanghai ‘Giga factory’ has surpassed its flagship Fremont facility in production capacity, and finished 2021 with an annualized production rate of 800,000 cars. And it’s expected to eventually ramp up production to 1,000,000 cars a year.

New Berlin and Austin ‘Giga factories’ Could Have a Strong Effect on Share Price

After much delay, Tesla’s Berlin ‘Giga factory’ finally opened last month. Wedbush analyst Dan Ives argues a ‘major overhang’ has been removed from the EV maker, saying he ‘cannot stress the production importance of Giga Berlin to the overall success of Tesla’s footprint in Europe and globally.’ The factory will eventually ramp up production to 500,000 cars per year.

Meanwhile, Musk is inviting 15,000 people to the opening of another ‘Giga factory’ in Austin, Texas, which he claims is ‘gearing up to be the biggest party on Earth.’ The factory will also ultimately produce 500,000 cars annually.

However, Steve Box, founder of Environmental Stewardship, is concerned that the ‘managed depletion’ of water resources in the State could put a huge strain on both the local environment and Tesla’s logistics in the years to come.

Further details on either of these new factories, particularly on their potential impact on production numbers for 2022 could have a strong effect on the Tesla share price trajectory.

Regulatory Issues Are Always around Musk

No stranger to controversy, Musk has often found himself in hot water with the US Securities and Exchange Commission (SEC). Many of his battles with the SEC have revolved around his use of Twitter.

After tweeting ‘funding approved’ to take Tesla private in 2018, he was forced to agree that some of his tweets would be pre-approved by a lawyer before being published. Musk is currently attempting to nullify this deal.

But he’s also under investigation for his November Twitter poll asking whether he should sell 10% of his stake in Tesla. And now, Reuters reports he may have broken US securities law over his share purchase of 9.2% of Twitter.

With a board seat, and as the largest shareholder, some investors are concerned that Twitter will distract him from running his EV company. While it’s unlikely that these regulatory issues will feature in official releases, Musk has previously veered off-topic on earnings calls.

Any comments, good or bad, could be reflected in the Tesla share price.

Analyst Opinions:

BofA analyst John Murphy maintains a “Neutral” rating on Tesla and gives a $1,100 price target.

JP Morgan Analyst Ryan Brinkman raised its price target on Tesla to $335 from $325.

Morgan Stanley analyst Adam Jonas rates Tesla a Buy and has a $1,300 price target for the shares.