Tesla Inc (NASDAQ:TSLA) stock rose 7.04% (As on Apr 21, 11:30:56 AM UTC-4, Source: Google Finance) after the company reported better-than-expected first-quarter results, buoyed by strong demand for its electric vehicles, with Elon Musk predicting output will grow at a fast clip for the rest of the year despite supply-chain challenges. The company cautioned that production remains constrained by shortages and higher prices for key components, a common refrain for automakers due to global bottlenecks on supplies of parts such as semiconductors. Tesla should be able to make up for any production shortfalls in the first half of the year from coronavirus-related shutdowns at its factory in Shanghai, and is on track to expand production to more than 1.5 million vehicles this year. It delivered about 936,000 cars in 2021. Further, the company has raised its prices in China, the United States and other countries, after CEO Elon Musk said in March that the US EV maker was facing significant inflationary pressure in raw materials and logistics amid the crisis in Ukraine.
Meanwhile, Musk offered to buy Twitter last week, sparking concerns about him being distracted from Tesla at a time when it is ramping up production at new factories in Berlin and Texas. The new factories will be key to meeting demand and reducing reliance on its China factory, its biggest one, which is slowly recovering from a plant shutdown. There are concerns that Musk may sell some Tesla stocks or borrow against additional Tesla shares to finance his $43bn bid to buy Twitter.
TSLA in the first quarter of FY 22 has reported the adjusted earnings per share of $3.22, beating the analysts’ estimates for the adjusted earnings per share of $2.27. The company had reported the adjusted revenue growth of 81 percent to $18.8 billion in the first quarter of FY 22, beating the analysts’ estimates for revenue of $17.9 billion. Sales of its regulatory credit to other automakers jumped 31 percent to $679m in the first quarter from a year earlier, helping boost revenue and profits. Quarter-end cash, cash equivalents and short-term marketable securities increased sequentially by $0.3B to $18.0B in Q1, driven mainly by free cash flow of $2.2B, partially offset by debt repayments of $2.1B.
Moreover, in the past two months, the company has began deliveries of Model Y from Gigafactory Texas and Gigafactory Berlin-Brandenburg (negligible impact on Q1 gross profit). At the same time, the company is putting significant efforts into in-house cell production, raw material procurement and supplier diversification.