Tesla race Elon Musk ahead of rising costs with price increases

Results for Tesla, Inc. exceeded expectations on Wall Street on Wednesday, as higher prices helped isolate the electric car maker from chaos and rising costs.

The results should also trigger $ 23 billion in new payments to CEO Elon Musk, who is already the richest man in the world.

Tesla has been a spin-off since the outbreak of the pandemic, with deliveries and revenues for several quarters when competitors struggling with supply chain tendencies halted production.

Shares of Tesla rose by 5% after the end of regular trading. At a conference call for investors, Musk said Tesla has a fair chance of achieving 60% growth in car sales this year and is still confident of seeing 50% annual delivery growth for several years.

Tesla raised its prices in China, the United States and other countries, after Musk said in March that the American electric car manufacturer was facing significant inflationary pressures on raw materials and transportation during the crisis in Ukraine.

“Our own plants have been under capacity for several quarters, with the supply chain becoming the main limiting factor, which is likely to continue through 2022,” Tesla said in a statement.

The price increases are designed to cover higher costs over the next six to 12 months, which protects Tesla on orders for cars that it could not deliver for a year.

“Price increases are well above cost inflation,” said Craig Irwin of Roth Capital.

“Chinese manufacturing problems seem to be well managed and we expect Austin and Berlin to make up for it after a 19-day shutdown in Shanghai,” he said, referring to two new Tesla plants in Texas and Germany that have opened in recent months.

The results allowed Musk to achieve three of the performance targets worth a total of $ 23 billion in new benefits. He receives no salary and his salary package demands that Tesla’s market value and financial growth reach a series of progressive goals.

The world’s most valuable carmaker said revenue was $ 18.8 billion in the first quarter ending March 31, up from an estimated $ 17.8 billion, according to IBES data from Refinitiv. This is an 81% increase from the previous year.

Revenue from the sale of its regulatory powers to other automakers increased by 31% to $ 679 million in the first quarter of the previous year, which helped increase revenue and profits.

Earnings per share were $ 3.22, which is better than analysts’ forecasts of $ 2.26.

Tesla’s pre – tax profit (EBITDA) on each delivered vehicle increased by more than 60% to USD 16,203 in the last quarter compared to the previous year.

Tesla said it had lost about months of construction volume from its Shanghai plant due to closures related to COVID. It said production is resuming in limited quantities, which will affect total construction and delivery volumes in the second quarter.

Musk expected Tesla’s total production in the current quarter to be similar to the first quarter.

Lithium is software

Musk said lithium was responsible for cost increases and a “limiting factor” for the growth of electric cars.

He urged companies to enter the lithium business, which he said would generate huge margins thanks to high prices.

“The lithium margin right now is almost a software margin … Do you like to mint money? Well, the lithium trade is for you.”

He also said that Tesla will have “some exciting announcements in the coming months” about securing raw materials for batteries.

Musk said his own 4,680 battery cells would be at risk for production next year if it does not solve mass production by early 2023. “But we are very confident of doing so.” He also said that to reduce the risk, it will also use existing, 2,170 auto batteries manufactured in Texas.

Musk said Tesla expects to mass-produce a robotic axle without a steering wheel or pedal by 2024.

In the call, Musk did not mention on Twitter that he offered to buy last week for 43 billion dollars. Investors are worried that he could sell some Tesla shares or borrow more Tesla shares to finance his offer.

Investors are also worried that Musk will be disrupted by its Twitter offer at the same time as Tesla is increasing production at new plants in Berlin and Texas.

“Factory ramps take time and Gigafactory Austin and Gigafactory Berlin-Brandenburg will be no different,” Tesla said in a statement.

The new factories will be the key to meeting demand and reducing confidence in their factory in China, the largest factory, which is recovering after the factory closes.

Tesla race Elon Musk ahead of rising costs with price increases

Source link Tesla race Elon Musk ahead of rising costs with price increases

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