DETROIT (AP) — Tesla reported Wednesday that its first-quarter net earnings were over seven times greater than a year ago, powered by strong sales despite global supply chain kinks and pandemic-related production cuts in China.
The electric vehicle and solar panel company made a record $3.32 billion from January through March. Excluding special items such as stock-based compensation, the Austin, Texas, company made $3.22 per share. That soundly beat Wall Street estimates of $2.26 per share according to data provider FactSet.
Revenue for the quarter was $18.76 billion, also beating estimates of $17.85 billion. It was boosted by multiple price hikes meant to offset rising costs of lithium, nickel, cobalt and other raw materials.
It may be harder for Tesla to post similar numbers later this year. It's facing costs from ramping up new factories in Germany and Texas, as well as rising commodity prices. It's also looking at increased competition as startups and legacy automakers roll out more electric models.
But CEO Elon Musk said on a conference call with analysts that waiting lists are long even as Tesla raised prices anticipating costs that will come during the next six to 12 months. “We are obviously not demand limited, we are production limited," he said.
Tesla has been spared many increases because of long-term contracts that have kept costs down, Musk said, but those contracts will expire. Some suppliers are seeking 20% to 30% price increases from last year through the end of this year, he said.
“We hope we don't need to increase the pricing further,” Musk said.
Tesla's lowest-priced car, the Model 3, now starts at nearly $47,000.
Tesla has also been able to control costs with manufacturing efficiencies and a new battery chemistry that has higher energy density per cell, the company has said.
The company said its weekly production for the quarter was strong, but a spike in COVID-19 cases brought the temporary shutdown of its factory in Shanghai, as well as part of Tesla's supply chain.
Tesla seems to have dealt with parts shortages better than the rest of the industry. Musk said the Shanghai plant is operational now but lost a couple of weeks of production. He still expects Tesla to build 1.5 million vehicles this year.
Shares of Tesla closed Wednesday down nearly 5% at $977.20, but it more than regained the day's losses in extended trading, after the company released its numbers. The stock is down about 7.5% so far this year.
Musk was not asked about his $43 billion hostile bid to take over Twitter.
Despite the Chinese production and supply chain problems, Tesla reiterated its guidance of 50% annual average growth in vehicle deliveries over the next several years. “The rate of growth will depend on our equipment capacity, operational efficiency and the capacity and stability of the supply chain,” the company said.
Although production has started at the Texas and German factories, Tesla said the ramp up at both sites will take time. The company said its factories have run below capacity because of parts supply shortages.
Tesla also says it expects “Full Self-Driving” beta test software to be released to all U.S. customers who purchased the feature by the end of the year. Musk said about 100,000 owners are testing the system now, on public roads. Tesla has said the cars cannot drive themselves, despite the name, and drivers must pay attention and be ready to intervene at all times.
Tesla delivered a record 310,000 vehicles worldwide in the first quarter, up roughly 68% from the same period in 2021. It delivered 185,000 vehicles in the first quarter of last year.
Last year the company delivered a record 936,000 vehicles, an 87% increase over 2020 numbers. The company said in February that it expects 50% annual growth in sales, meaning it expects about 1.4 million vehicles to be delivered this year.