TECH STARTUPS
On January 3, Tesla stock tumbled to start 2023 with shares trading at $108.10. It didn’t take long before the so-called analysts started to blame Musk’s acquisition of Twitter for Tesla’s stock free fall. For many years, experts have repeatedly called for the demise of Elon Musk’s electric car company. But Teslas continues to silence its critics.
Yesterday, the electric car giant reported better-than-expected fourth-quarter revenue of $24.32 billion vs the $24.16 billion expected by Wall Street analysts. The world’s largest electric maker was rewarded by investors as Tesla’s shares rose by about 15% in the first hour of trading Thursday.
Tesla shares are up over 14.89% on Thursday morning, quelling fears that slow sales may affect the company’s bottom line after cutting its prices by about 20 percent in China and the United States.
Despite the good news, Musk offered a cautioned but optimistic outlook for the company’s production in 2023. “If it’s a smooth year, without some big supply chain interruption or massive problem we have the potential to do 2 million cars this year. I think there would be demand for that, too,” Musk told an analyst.
In the fourth quarter, the electric vehicle maker beat Wall Street targets in its fourth-quarter revenue and profit on Wednesday despite a sharp decline in its profit margins. According to financial market data firm Refinitiv, Tesla had revenue of $24.32 billion vs the $24.16 billion expected. Its adjusted earnings during the quarter were $1.19 vs the $1.13 per share expected. The total revenue during the quarter includes $21.3 billion in automotive, $1.78 in services, and $1.311 billion from energy generation and storage.
The positive news comes just a few months after Tesla cut the prices of its cars in China and the United States in late 2022. The earnings also come as Tesla sought to reassure investors that it can cut costs and still continue to generate cash as competition intensifies from other electric car maker rivals. Tesla’s shares ticked higher in the after-hours market.
In an earnings call with shareholders and analysts on Wednesday, Tesla CEO Elon Musk said, “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.”
In recent years, Tesla has outperformed the industry and has also seen increased sales and record profits. The company was also able to weather the pandemic of the last three years and global supply-chain issues better than its rivals. However, its automotive gross margins came in at 25.9%, the lowest figure in the last five quarters.
The reported automotive revenue of $21.3 billion in the fourth quarter, represents 33% growth year-over-year for the world’s largest electric car maker.
