Tesla Decreased Its Deliveries and Profit but Elon Musk Remain Optimistic
In spite of supply chain woes and labor shortages, electric automaker Tesla achieved better-than-expected Q2 earnings and is pushing forward with its plans for growth.
In spite of the struggles that Tesla and many other automakers have faced in the past year, the dynamic EV brand is consistent about coming out on top.
According to
Bloomberg
, Tesla managed better-than-expected earnings for Q2. Dive in with car ownership super app Jerry as we discuss how Tesla plans to keep its current momentum going and turn things around for the second half of the year. Supply chain woes persist for Tesla
Last quarter, Tesla’s assembly line at its Shanghai factory was
shut down for weeks
as a result of China’s COVID lockdown policy. While the plant was reopened by mid-April, it was still only managing less than half of its pre-shutdown output. The automaker is also putting its
plan to make larger battery cells
on hold for the rest of the year, instead relying on its supply of older-generator cells to fulfill orders. Still, Tesla is pushing forward with its plan to increase vehicle deliveries by 50% on average year-over-year for the next several years. As of right now, the automaker is still on track.
“They are maintaining their 50% growth rate, which is a bit of a surprise. I thought they might back off from that,” said Gene Munster of Loup Ventures to Bloomberg. “They are doing a good job navigating a difficult environment.”
Tesla’s surprising Q2 outcomes
Tesla shares rose 4.6% to $776.48 as of 9:45 a.m. Thursday in New York. The brand’s
Q2 earnings
have exceeded expectations, surpassing $1 billion—but how did it get there?On a call with analysts reported by Bloomberg, Musk explained Tesla’s Q2 victory. “[I]t’s been kind of supply chain hell for several years,” said Musk, “We have the potential for a record-breaking second half of the year.”
This news came after Tesla sold 75% of its Bitcoin holdings. Originally purchased for $1.5 billion back in February, Tesla sold off $963 million of its Bitcoin assets following concerns about the company’s liquidity.
Tesla’s adjusted earnings of $2.27 per share exceeded the average of $1.83, but its still a profit decline from the $3.22 per share of the first quarter. It was also the first time in two years that the company failed to increase deliveries from one quarter to the next.
How Tesla fares in the second half of the year will depend on how quickly it can produce the Model Y SUV and the much-anticipated
Cybertruck
.Tesla ownership costs are rising
One unfortunate outcome of Tesla’s ongoing supply chain issues is that consumers pay in the end. Finding a way to keep manufacturing costs down and access to raw materials easier and more sustainable will pay off for Tesla and other EV makers.
Higher prices
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