Tesla on Wednesday reported record net income within the fourth quarter of last yr, and the corporate predicted that additional software-related profits would keep margins higher than some other automaker.
Austin, Texas, an electrical vehicle and solar panel maker, said it earned $3.69 billion from October to December, or an adjusted $1.19 per share. That beat the $1.13 estimate, which was downgraded by analysts, in keeping with FactSet. The corporate’s profit was 59% higher than in the identical period a yr ago.
Revenue for the quarter was $24.32 billion, below the $24.67 billion expected by analysts.
Nevertheless, the automaker’s gross profit margin, or revenue less cost of products sold, fell from 30.6% within the fourth quarter of 2021 to 25.9% over the identical period in 2022.
CEO Elon Musk told analysts in a webcast that the outcomes got here in a difficult yr with “enormous hardships,” including factory closures and provide chain issues.
![Elon Musk said this in December](https://nypost.com/wp-content/uploads/sites/2/2023/01/tesla-musk-earnings1.jpg?w=1024)
On January 13, the corporate slashed prices within the US and China, its two biggest markets, by as much as 20% for some models, leading many analysts to imagine that demand was down as a result of high prices and rising rates of interest.
But Musk said demand is powerful, and thus far in January, the corporate has recorded the largest orders in Tesla’s history.
“We expect demand will probably be good, despite the likely contraction of the general automotive market,” he said. “Demand far exceeds production,” Musk said, adding that Tesla is making small price increases.
Tesla said in its letter to investors on Wednesday that it can produce about 1.8 million vehicles this yr, outpacing its projected annual growth rate by 50%. However the outlook a part of the letter didn’t include estimates for this yr’s deliveries. Previously, Tesla had claimed that its shipments would grow at a rate of fifty% a yr for many years.
![Tesla car](https://nypost.com/wp-content/uploads/sites/2/2023/01/INSTAR_p44Yxh5Wg.jpg?w=1024)
Morgan Stanley analyst Adam Jonas wrote in a note to investors on Wednesday that demand was a difficulty for the corporate. “In our view, the value cuts are indeed a response to a slowdown in incremental demand relative to incremental supply,” he wrote.
Tesla also said it deployed its “fully self-driving” software to roughly 400,000 users and that it reported $324 million in revenue from fully self-driving software through the quarter. Despite its name, “fully autonomous driving” cannot drive itself, and Tesla warns drivers that they need to be able to intervene at any time.
The corporate said it knows macroeconomic questions are being raised amid rising rates of interest. “Within the near term, we’re accelerating our cost reduction roadmap and aiming for higher production rates while specializing in delivering the following phase of our roadmap,” the letter reads.
Tesla’s delivery guidance this yr has been “quite general” as a result of uncertainty over coronavirus cases in China and economic issues around the globe, said Jeff Windau, an analyst at Edward Jones.
“I just think they’re probably going to be a bit more cautious and conservative going into the yr,” he said. “Their approach will not be really different from what we have seen with other firms.”
Tesla shares rose barely on Wednesday, closing at $144.43. They rose lower than 1% in prolonged trading after the earnings report.
The corporate’s shares fell 65% last yr amid concerns Musk was distracted by its $44 billion Twitter acquisition. But thus far this yr they’ve increased by about 35%.
The worth cuts, which began on Jan. 13, fueled Wall Street fears that demand for Tesla was declining as there was intense competition from start-ups and legacy automakers.