Published - January 26, 2023 @ 11:20 AM (EET)
Even as it gave mixed signals on the outlook for growth in vehicle deliveries, Tesla (NASDAQ:TSLA) reported better-than-expected profits in the latest quarter.
On the company's fourth-quarter earnings call on Wednesday, Tesla Inc. CEO Elon Musk said that 2023 could hit the 2 million vehicle target as demand got a boost from price cuts.
Musk said on a call with analysts and shareholders,
"Thus far in January, we've seen the strongest orders year-to-date than ever in our history. We're currently seeing orders of almost twice the rate of production."
The electric-vehicle maker expects to make 1.8 million vehicles this year, up 31% from last year's output. While the numbers are below its longer-term goals to expand by 50% a year, Musk still made it clear he is committed to growing as fast as supply chains allow.
EARNINGS RESULTS
Tesla's automotive revenue in the fourth quarter came in at $21.3 billion, representing 33% growth year-over-year.
More important is the margin amount the company is willing to sacrifice to pursue that goal as market conditions get more difficult in the face of increased competition and interest rates rising.
Tesla reported an operating margin of 16% for the fourth quarter, down from 17.2% in the prior quarter. Meanwhile, operating cash flow in the quarter was $3.32 billion, and free cash flow was $1.4 billion.
Commenting on the rising interest rate environment, Tesla said they are used to challenges and are accelerating their cost reduction roadmap to accelerate higher production rates.
Services and other revenue, including fees for out-of-warranty vehicle repairs and other items, reached $1.6 billion in the quarter.
NOW WHAT
Looking ahead, the company did not issue new guidance.
However, Tesla reiterated that it roughly doubled its production capacity in 2022 and confirmed it's still on track to start building the long-anticipated Cypbertruck in August later this year.
Citing his 127 million followers on Twitter, Musk said his presence on the social media platform he bought for $44 billion in late October is a net positive despite being flagged as an expensive distraction.
Following the results, Tesla shares were trading fractionally higher. Still down 53% over the last year, the stock is up 17% year-to-date.
