Tesla reported a $3.3 billion profit in the first quarter of 2022, despite China’s supply chain challenges and production delays. The firm noted that Tesla earned that profit on revenue of slightly more than $18.7 billion. This increases 81% year over year, from $10.4 billion in sales in Q1 2021.
The company sold $679 million worth of emission credits to other manufacturers, up from $314 million in Q4 2021. The firm earns cash by selling these credits to automakers that produce fewer “clean” automobiles than the US, and European governments need.
Credit sales have proven advantageous in the past, allowing Tesla to make a profit while its car-making business faltered. Last summer, the company claimed that its manufacturing and energy sales operations were profitable for the first time in its history, excluding emission credit sales.
Tesla indeed had a memorable quarter. The company opened two additional plants — one in Berlin on March 22nd and another in Austin, Texas, on April 8th — while also forced to temporarily close its Shanghai plant due to surging COVID numbers. Tesla’s quarterly results were likely to be weighed down by the costs of opening those two factories while simultaneously battling to keep its Chinese facility operational.
Last month, the business announced that production began in Berlin and that Model Y deliveries began in April from Texas. Additionally, the company stated that it will start manufacturing structural battery packs with 4680 cells in Texas later this year, alongside regular battery packs with 2170 cells.
Tesla’s financial report also comes on a solid quarter for delivery and production. In Q1 2022, the firm stated that it delivered 310,048 vehicles to its clients. Elon Musk, Tesla’s CEO, called the achievement “exceptionally difficult,” noting global supply chain challenges and the company’s Shanghai factory’s closure due to an increase in COVID cases. Despite this, Musk forecasted on the business’s earnings calls that the company would be able to scale up manufacturing and produce 1.5 million vehicles this year.
Tesla reported that it has delivered 295,324 Model 3 and Model Y automobiles, whereas 14,724 Model S and X vehicles. Deliveries grew slightly from 308,600 in the previous quarter and exceeded 184,800 in the first quarter of 2021, reflecting a 68 percent year-over-year rise. Tesla reported that it has produced 305,407 automobiles in the last three months.
Increasing revenue Tesla
Additionally, the company has maintained its increasing revenue per vehicle — the gross automotive margin was 32.9 percent in Q1 2022, up from 26.5 percent in Q1 2021. According to the company’s investor notes, it boosted the average selling price of its vehicles and increased the number of cars delivered.
Tesla outperformed its competitors in navigating the global supply chain crises, producing record quarterly deliveries and earnings for multiple quarters. By acquiring alternative semiconductors and rewriting software, the business avoided the same issues as other big manufacturers.
Tesla also had a busy quarter for non-financial reasons. The company was issued recall notices for a variety of malfunctioning features, including a pedestrian warning sound that was obscured by loud music played over the external “Boombox” speakers and an aspect of the company’s Full Self-Driving beta software that allowed vehicles to roll through some stop signs without coming to a complete stop.
Tesla’s legal troubles intensified this quarter. California’s human rights department sued the corporation after many employees came out with racial discrimination and harassment allegations. One former Black Tesla employee was granted $137 million in damages after complaining about a hostile work environment filled with “everyday racist epithets.”