Tesla posts record Q1 profits buoyed by strong demand for electric vehicles

Tesla also generated billions of money through sales of zero-carbon credits to other automakers, helping them comply with stricter emissions regulations.
By : HT Auto Desk
| Updated on: 21 Apr 2022, 09:46 AM
File photo of Tesla cars parked in a lot at the Tesla factory in Fremont, California. (AFP)
File photo of Tesla cars parked in a lot at the Tesla factory in Fremont, California. (AFP)
File photo of Tesla cars parked in a lot at the Tesla factory in Fremont, California. (AFP)
File photo of Tesla cars parked in a lot at the Tesla factory in Fremont, California.

EV giant Tesla has reported better-than-expected first-quarter results on the back of strong demand for its electric vehicles. The company's CEO Elon Musk has predicted that the output will grow at a fast rate for the rest of the year despite supply-chain woes. However, the company cautioned that production remains constrained by shortages and rising cost of key components due to global bottlenecks on supplies of parts such as semiconductors.

Musk has predicted that despite all this Tesla should be able to make up for any production shortfalls in the first half of the year from coronavirus-related shutdowns at its Shanghai factory. He also noted that the automaker is on track to expand production to more than 1.5 million vehicles this year. It delivered about 936,000 cars last year. “We may pull a rabbit out of the hat. Q3 and Q4 will be substantially higher," Musk said on a conference call.

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The company increased sales of higher-margin vehicles while cut costs where required, helping the automaker improve its automotive gross margin to 32.9%. In the first three months of this year, the Texas-based company posted strong gains in profit and revenue as well as the sale of regulatory credits, making a total of $679 million, i.e., more than double of the previous quarter.

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The company generated billions of money through sales of zero-carbon credits to other automakers, helping them comply with stricter emissions regulations. However, Tesla expects credit revenue to shrink eventually as more automakers are launching EVs to meet the growing demand for battery-powered vehicles. “It speaks to where the rest of the auto industry is when it comes to selling EVs in high volumes," said Gene Munster, managing partner of Loup Ventures. “They are still behind" Tesla, he said.

(with inputs from Bloomberg)

 

First Published Date: 21 Apr 2022, 09:45 AM IST
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