Tesla's shares surge in after-hours trading as it reports record profit

World’s biggest EV maker marks 14th straight profitable quarter and seventh three-month period with more than $1bn in profit

Tesla's total revenue during the last quarter jumped 37 per cent to more than $24.3 billion. Reuters

Tesla, one of the world's most valuable car makers, has reported its largest quarterly net profit driven by record vehicle deliveries between October and December as revenue soared.

The company’s net profit jumped 59 per cent annually to reach about $3.7 billion in the fourth quarter of 2022, from the same period a year earlier.

This is the 14th straight profitable quarter and the seventh consecutive three-month period with more than $1 billion in profit for the world’s biggest EV maker.

Total revenue during the quarter jumped 37 per cent to more than $24.3 billion, exceeding analysts’ expectations of $24.1 billion.

This was the ninth time in a row the company reported $10 billion or more in sales. This was also about 13.3 per cent up on a quarterly basis.

The Nasdaq-listed company's stock price surged about 5.5 per cent in after-hours trading to $152.35 on Wednesday. In regular trading hours the shares gained about 0.38 per cent and settled at $144.43.

After a tumultuous 2022 that saw the company shares removed from the S&P 500 ESG Index and its market capitalisation fell well below $1 trillion that was reached in October 2021, the shares are up about 34 per cent since the start of this year.

The company's market value as of the close of trading on Wednesday is about $453 billion.

Elon Musk, Tesla's chief executive. AFP

Tesla's automotive revenue, which constituted almost 88 per cent of Tesla’s total sales in the December quarter, rose 33 per cent year-on-year to more than $21.3 billion.

The company’s total revenue in the 2022 full financial year grew 51 per cent to almost $81.5 billion while its net profit more than doubled yearly to about $12.6 billion.

Tesla, which went public in 2010, said its cash, cash equivalents and investments “increased sequentially by $1.1 billion to $22.2 billion” at the end of the last quarter. It was driven mainly by a free cash flow of $1.4 billion, partially offset by a debt repayment of $497 million.

The Texas-headquartered company said it is accelerating its “cost-reduction road map and driving towards higher production rates”.

“As we progress into 2023, we know that there are questions about the near-term impact of an uncertain macroeconomic environment, and in particular, with rising interest rates,” Tesla said.

Tesla said it remained on track to begin production of its cyber trucks later this year at its gigafactory in Texas. Bloomberg

“We are prepared for short-term uncertainty while being focused on the long-term potential of autonomy, electrification and energy solutions. We believe that no other OEM [original equipment manufacturer] is better equipped to navigate through 2023 and ultimately succeed in the long run than we are.”

Tesla said the company has sufficient liquidity to fund its future product road map, long-term capacity expansion plans and other expenses.

In December, Tesla’s billionaire chief executive Elon Musk said “radical interest rate changes” had affected the affordability of vehicles, both new and used, and he indicated that Tesla could slash prices to sustain volume growth.

Earlier this month, the company reduced the prices of vehicles globally by as much as 20 per cent.

“Our ASPs [average selling prices] have generally been on a downward trajectory for many years. Improving affordability is necessary to become a multimillion-vehicle producer,” Tesla said

While Tesla’s ASPs halved between 2017 and 2022, the company’s operating margins have consistently improved from about minus 14 per cent to 17 per cent in the same period.

This margin expansion was achieved through the “introduction of lower-cost models, the buildout of localised, more efficient factories, vehicle cost reduction and operating leverage”, Tesla said.

Tesla also set another record for annual deliveries as it shipped 1.31 million cars last year, up more than 40 per cent year on year. The jump in deliveries was buoyed by a record fourth quarter, despite production challenges and concerns about weakening demand.

Deliveries for the three-month period ended on December 31 were up by about a third to 405,278, from 308,600 a year earlier, and about 18 per cent higher from 180,570 in the third quarter.

For 2023, Tesla aims to achieve more than 50 per cent growth rate and produce about 1.8 million cars.

Tesla produces its vehicles in Fremont, California; Austin, Texas; Shanghai, China; and Berlin, Germany.

In the previous quarter in its energy segment, Tesla’s solar deployments increased by 18 per cent on an annual basis to 100 megawatts, one of the strongest quarterly results in recent years. The company deployed 348MW of solar in 2022, the highest deployment since 2017.

Meanwhile, the energy storage deployments increased by 152 per cent year-on-year in the December quarter to 2.5 gigawatt hours.

“Demand for our storage product remains in excess of our ability to supply,” the company said.

The company said it remained on track to begin production of its cyber trucks later this year at its gigafactory in Texas. It is expected to share further details about cyber trucks at its Investor Day on March 1.

The Tesla Semi, a new electric lorry, is expected to cost $180,000. Reuters

The battery-powered lorry on display at the Tesla Giga Texas manufacturing plant in Austin, Texas, in April 2022. AFP

Tesla chairman and chief executive Elon Musk unveils the the Semi electric lorry in Hawthorne, California, near Los Angeles. AFP

Mr Musk has described electric lorries as Tesla’s next effort to move the economy away from fossil fuels. Reuters

The Tesla Semi has a range of 805 kilometres. Reuters

Tesla has begun to produce the electric lorries and Pepsi will receive the first deliveries from December 1. Reuters

Tesla chief executive Elon Musk. Reuters