Amid the woes caused by inflationary pressure and supply chain chaos to many, the tech giant Tesla Inc. (TSLA) gave another beat quarter with record earnings and deliveries.
On April 20, shares of the EV maker rose by 6.84% in the pre-market when it posted beat earnings for Q1 2022. Thus, TSLA’s value reached $1,044.01 apiece in the session after it declined by 4.96% to $977.20 in earlier trading.
Investors were confused and expecting not-so-good earnings as multiple factors caused the larger industry to face many challenges. Supply chain issues and hiking inflation had most o Tesla’s competitors grappling with production.
TSLA’s Q1 2022 Overview
The tech giant and leading EV maker gave another hit quarter with adjusted earnings pegged at $3.22 a share against $0.93 in Q1 2021. Beating Street’s forecast of $2.26 per share, the quarterly earnings grew by a humungous 246% YOY.
Not just the earnings, TSLA’s revenues rose by a staggering 81% YOY with automotive revenues increasing by 87%. Thus, the total revenues were $18.756 billion for the quarter while analysts expected $17.76 billion.
On the other hand, while production grew by 69% YOY, it fell a little short from the last quarter of 2021. Tallying at 305,407 vehicles in Q1 2022 against 305,840 in Q4 2021, the giant did get impacted by supply-chain disruptions and Covid-related closures at its Shanghai factory.
Industry Situation & TSLA
Like all other industries, the EV sector has also been hit by the pandemic, Russia-Ukraine-related concerns, rising inflation, supply chain disruptions, and labor costs. Most EV markers have been struggling with production amid a huge spike in material costs on top of supply chain chaos. But TSLA has been an outlier since the pandemic emerged. The giant has been posting record deliveries and earnings for several quarters while rivals keep wrestling with the market woes.
What to Expect with Shanghai Closure amid the Frenzy?
Investors were worried about the near-term growth of the company due to its Shanghai factory shut down as Covid resurged while supply chain disruptions continue amid rising inflation. TSLA’s Shanghai factory has been a large contributor to its explosive growth. Investors were expecting the impact of the closure to be prominent in Q2 more than in Q1 as the closedown happened near the end of March. But the latest earnings of the company and Musk’s discussion on it have investors take some relief. The price increase of its EVs is nicely exceeding cost inflation.
Moreover, the increased prices are designed to cover higher costs for the next 6-12 months while Austin and Berlin are expected to make up for the slack from Shanghai. The company’s two new factories in Texas and Germany started deliveries recently.
