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Tesla: performance and future

Tesla released data for the last quarter taking stock of the situation and looking to the future. 

Elon Musk‘s company is enjoying the excellent quarterly that shows truly remarkable data and plans for the future, which appears to be brighter than hoped. 

A record quarter is coming for Tesla thanks to growing demand for electric vehicles.

A 37% jump in Q4 revenues ($24.3 billion) had never happened before and sets a new record for the company. 

Revenues grew by 30% to $21.3 billion, and with it, Model 3 or better known as Model Y production grew by 44%.

The electric automotive queen has sent 31q more cars to customers and dealerships than expected (405,278) and production is unabated. 

The challenge is to increase production by 50% abruptly so as to meet 100 % of demand which would bring Tesla’s total production to 1.8 million cars this year. 

While the average price has risen to meet inflation in Europe Musk has chosen to lower the prices of its cars resulting in a surge in sales. 

Operating profit touches $3.9 billion with a 49% increase, profits have grown but margins not so much. 

The company boasts a free cash flow of $7.6 billion in 2022 and the excellent figures did not produce such a jaw-dropping surge in New York but did play the role of reassuring investors and attracting new capital. 

Some analysts including Hargreaves Lansdown chief analyst Sophie Lund-Yates believe that with this data Tesla supporters have been reassured and some optimism has returned after the storm known as 2022. 

Meanwhile, the reopening of the Asian market has opened a prairie for Musk’s business. 

The cost-cutting operation and a lower entry price are an incredible driver for orders for the company’s electric cars despite the fact that there is still significant inflation and growing competition. 

“Overall, competition remains a very real threat, especially in China. There is a lot of money being invested in the EV market and it is not impossible that Tesla will be outpaced. Tesla will need to get its feet on the ground if it is to maintain, let alone grow, the market position it now resides in. 

It’s also worth considering that infrastructure remains lacking in many markets. Tesla’s service infrastructure is notoriously lacking, so it could sell a lot of cars, but if those customers aren’t happy, they won’t come back for an upgrade.”

Sophie Lund-Yates stated. 

Musk’s controversial omnipresence in his companies has led some critics and investors to accuse him of neglecting Tesla, specifically in favor of Twitter. 

Musk had to restore relations with his largest shareholders and deal with the lawsuits in which he is a defendant in order to dispel all the ill-feeling about the case and restore investor confidence. 

Tesla wants to become the Apple of cars, in particular electric cars, by offering an all-encompassing and highly loyalty-enhancing product for its customers. 

To implement its long-term plan Tesla needs to keep sales high, which it is doing for now. 

In essence, Tesla has resumed strong growth by taking back a market position comparable almost to a monopoly. 

Both economically and industrially there are problems that could greatly file down the company’s margins, yet Musk seems to have a solution. 

Tesla needs to grow production exponentially, which will consequently affect profit growth given the amount of drivers to please. 

Many countries around the world have given themselves a date for the mandatory switch to electric mobility which is generally set at 2040 but in Europe for example the limit is 2035. 

Switching all car owners from hydrocarbon to electric vehicles is a wonderful assist to Musk’s company’s production. 

George Michael Belardinelli
George Michael Belardinelli
A former corporate manager at Carifac Spa and later at Veneto Banca Scpa, blogger and Rhumière, over the years he has become passionate about philosophy and the opportunities that innovation and the media make available to us, in particular the metaverse and augmented reality