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Tesla profits soar despite price cuts as electric car giant announces £3bn gigafactory expansion plan
Tesla reported record-breaking results after the highest number of vehicle deliveries ever.
The electric car maker announced a profit of £11.4 billion for 2022, up 85 percent year-on-year, while revenues rose 51 percent to £65.7 billion.
It followed a fourth-quarter profit for the group of £3.3 billion, 43 per cent higher than in 2021 and better than market expectations.
Expansion: Tesla will inject more than £2.9bn into its Nevada site to build two new factories, one to build its long-awaited electric semi-truck (pictured) and another for its 4680 battery
The results came after the company delivered a record 405,278 electric cars in the last three months of the year. During that period, some 439,701 vehicles rolled off the production lines, also a record high.
The numbers meant Tesla’s 2022 shipment numbers hit a record of more than 1.3 million as the company kicked off production at new plants in Texas and Germany.
The results followed a series of sharp price cuts from Tesla in the US, Europe and China as it appears to be shielding itself from growing competition from other automakers trying to break into the industry.
While the company acknowledged that its average selling prices had “generally been on a downward trajectory for many years,” it stressed that improving affordability was “necessary” and that despite the cuts, profit margins had grown over time. Shares of the company fell slightly in aftermarket trading on Wall Street.
The results came after Tesla unveiled plans for a multibillion-pound expansion of its Nevada gigafactory as it moves forward with plans to mass-produce a new battery and its long-awaited electric semi-truck.
The carmaker will inject more than £2.9bn into the site to build two new factories, one to build the truck and another to build the 4680 battery.
The 4680 is a key component for Tesla to meet its goal of cutting battery costs in half and increasing power cell production by a factor of 100 by the end of the decade.
Meanwhile, Tesla’s results will provide some comfort to boss Elon Musk, the world’s second-richest man, who is currently embroiled in a lawsuit amid claims he defrauded investors after tweeting in August 2018 that he was “funding had secured” to take Tesla private. .
The tweet sent the company’s share price skyrocketing, but later fell back when it became clear that a deal had not been agreed.
On Tuesday, Musk told a jury in San Francisco that he had “not a bad motive” and that he could have obtained funding from several private investors to finance a buyout.
But he admitted that he had no binding agreements from investors to provide the necessary cash.
Meanwhile, Musk is leading a bid to boost the fortunes of Twitter, the social media website he bought for £36bn last year after a protracted legal battle that erupted when he tried to back out of the takeover.
The company is suffering a drop in advertising spending as the global economy slows, while Twitter has also fallen victim to a lawsuit from the Crown Estate over unpaid rent for its London headquarters.