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Tesla reports record profits, confirms long-term outlook
Published on: Thursday, January 26, 2023
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Tesla’s quarterly results were fuelled by a 31% rise in vehicle deliveries compared with the year-ago period. (AP pic)
NEW YORK: Tesla reported another round of record quarterly profits Wednesday while confirming its long-term growth outlook in spite of concerns about rising competition and macroeconomic headwinds.

Elon Musk’s electric vehicle (EV) company reported fourth-quarter profits of US$3.7 billion, up 59% from the year-ago period as revenues jumped 37% to US$24.3 billion.

The results were fuelled by a 31% rise in vehicle deliveries compared with the year-ago period.

The EV giant, which startled investors earlier this month by announcing vehicle price cuts in the US and Europe, acknowledged challenges such as rising interest rates and an “uncertain macroeconomic environment.”

Tesla said it was accelerating its “cost reduction roadmap,” while working to ramp up production.

“In any scenario, we are prepared for short-term uncertainty,” said Tesla, while adding that its “relentless cost control and cost innovation” will allow it to navigate 2023 better than rivals.

The recent US and European price cuts – which followed similar actions last year in China – have prompted debate among analysts on whether they are a sign of weakness, or a shrewd tactic to increase market share.

Musk touted the move in a conference call Wednesday, saying Tesla has seen increased orders since it was announced.

“Price really matters,” the billionaire said. “These price changes really make a difference for the average consumer.”

The company has described its long-term plan as seeking to chalk up production growth of 50% per year, on average.

Tesla’s earnings report Wednesday reasserted that long-term forecast, but said it would likely only produce 1.8 million vehicles in 2023, about 31% above the 2022 production.

It also predicted a 37% growth in deliveries, at 1.3 million.

Musk has noted that Tesla’s output has been constrained by economy-wide supply chain and raw material shortages, but said Wednesday that output could reach two million in 2023 if there is a “smooth year” free of disruptive surprises.

Tesla confirmed plans to launch production of its Cybertruck in 2023 at its massive Texas plant.

Musk said the volumes of the Cybertruck would not be significant in 2023, but would be meaningful in 2024.

CFRA Research analyst Garrett Nelson described Tesla’s guidance as “mixed,” with 2023 volumes shy of estimates but the confirmation of Cybertruck production “a big positive.”

Shares of Tesla have fallen about 50% from their year-ago level, reflecting worries about the introduction of EVs from other automakers, the drag from a slowing economy and anxiety that Musk’s other pursuits such as running Twitter are hindering the company.

Musk’s US$44 billion acquisition of Twitter was just one of the myriad controversies surrounding the unpredictable billionaire.

But he defended the deal on Wednesday, saying his large Twitter following “speaks for itself” and benefits Tesla.

Musk has been in court this week addressing another thorny matter: a lawsuit filed by investors who argue that Musk’s statements in 2018 about potentially taking Tesla private were fraudulent and responsible for their losses.

Musk testified that a tweet about taking Tesla private at US$420 a share was no joke and that Saudi Arabia’s sovereign wealth fund was serious about helping him do it.

Shares of Tesla jumped 4.6% to US$151.02 in after-hours trading Wednesday.

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