Tesla blows away estimates with record $3.3 billion quarterly profit
What's the story
Tesla posted a record profit of $3.3 billion in the first quarter of 2022 amid supply chain constraints and production delays. The revenue figures of the company in Q1 stood at just over $18.7 billion. At the same time last year, Tesla made $10.4 billion in revenue and $1.1 billion in profit. It is likely to top production numbers this year as well.
Context
Why does this story matter?
Tesla has surprised everyone with its quarterly numbers. With the shutdown of its Shanghai factory and other supply chain issues, many believed the company to underperform. However, the world's most valuable automaker pulled a rabbit out of the hat again. The numbers will also act as a boost for the company which has been entangled in issues such as racial discrimination and faulty software.
Quarterly report
Tesla posted $18.7 billion in revenue last quarter
In Q1 of 2022, Tesla made $18.7 billion in revenue with $3.3 billion as profit. From emission credit sales, the company earned a whopping $679 million compared to $314 million in Q4 of 2021. It delivered 310,048 vehicles in the last quarter, up from 184,800 in the same quarter last year. The company's gross margin per car also saw an increase, continuing the trend.
Challenges
Increasing prices helped the automaker to deal with inflation
Tesla's impressive quarterly numbers are a result of shrewd management of supply-chain bottlenecks and COVID-forced shutdowns. The company fared better than its rivals by sourcing different chips and rewriting software. To keep up with its trend of increase in quarterly production, it has opened two new factories in Berlin and Austin. Price hikes have helped the automaker deal with inflation-related issues.
Future steps
Tesla is considering mining and refining Lithium to cut costs
Tesla sees software sales as an important profit driver in the future. The company is expected to release an advanced driver-assistance feature for all by the end of this year in the US. The automaker has been toying with the idea of mining and refining Lithium to deal with the metal's rising prices. The company's robotaxi may enter volume production in 2024.