Tesla has recounted a smaller-than-expected decline in its quarterly profit following a string of price upsurges on EVs (electric vehicles). The price increase helped to counterbalance production challenges resulting from China’s COVID-19 lockdowns and supply chain issues. The company’s Chief Financial Officer announced on Wednesday that the company still strives to attain a 50% growth in deliveries by the end year. He explained that although this target might seem tricky, it is still possible to attain using strong execution.
The company’s second-quarter revenue dropped 32% from its record levels during the first quarter. The Austin, Texas branch surprised analysts with a $2.26 billion better-than-expected net profit in this quarter. Thus, the company retained a 50% annual vehicle sales growth prediction over the following few years. However, this prediction entirely depends on equipment capacity and the supply chain. Tesla made a record-high $3.32 billion turnover during the first quarter.
Unfortunately, the company recorded 254,000 vehicle sales, the lowest quarterly sales since last fall from April through June. Nonetheless, Tesla predicts record-breaking production moving forward after recording the highest output in June. Analysts expected lower earnings due to the lower sales figures and its CEO’s tweets about laying off up to 10% of its workforce due to a possible recession. Musk expects most commodity prices to stabilize and inflation to ease by the end-2022.
the global economic challenges are hurting the company’s interests, despite vehicle prices increasing to “embarrassing levels”. In any case, the company exceeded Wall Street prediction from April to June with $2.27 adjusted earnings per share. Industry analysts expected a $1.81 revenue increase. Yet, the company exceeded its $16.54 billion estimates to $16.93 billion.
Analysts say Tesla's earnings were better than predictions. They highlighted the decrease in vehicle sales revenues since the first quarter resulted from better solar performance and robust energy storage. Musk reinstated the initial 50% annual automobile sales growth prediction but explained it depends on numerous external conditions. Most importantly, he proclaimed confidence in growing the electrical automobile market.
Tesla announced that it converted 75% of its Bitcoin investment this quarter to government currency. The Bitcoin conversion added $936 million in cash to the company’s balance sheet. Hence, Tesla spent about $1.5 billion on investment since the previous year. Generally, it booked up to $106 million in Bitcoin costs and added costs for worker reductions. Musk further highlighted indications that inflation might decline following a drop in most commodities prices.
