After the bell, Tesla (NASDAQ: TSLA) released its earnings, and the results caused the stock to rise somewhat after trading hours. Earnings per share (EPS) were $2.27 (adjusted), higher than the $1.81 estimate, and revenue was announced at $16.93 billion, lower than the $17.1 billion estimate.
Due to inflation and increased competition for battery cells and other components used in electric vehicles, Tesla’s automotive gross margin decreased to 27.9 percent from 28.4 percent a year ago and 32.9 percent last quarter. The company’s overall revenues were $14.6 billion, of which $1.47 billion came from services and other revenue and $866 million from the energy division.
According to the company’s shareholder deck, it generated $344 million in revenue from automobile regulatory credits in the second quarter. That represents a $10 million or about 3% drop from the same time in 2021.
Tesla’s new factory outside of Berlin produced more than 1,000 cars per week in June, according to CEO Elon Musk, who also predicted that Austin, Texas’s new factory, will soon reach the same production milestone.
Tesla reported 709 shop and service sites for the quarter and 3,971 Supercharger locations (with 36,165 total Supercharger connections) in the second quarter, indicating that its charging infrastructure has expanded more rapidly than its retail and service locations. These figures reflected a 19 percent increase in retail and service center locations and a 34 percent increase in charging locations year over year.
Crypto to Fiat Sales
The business provided little information on its purchases of bitcoin and sales of it, noting, “As of the end of Q2, we have converted about 75% of our Bitcoin purchases into fiat currency.” Cash and cash equivalents climbed by $847 million overall for the company during the quarter. When Tesla declared in early 2021 that it had bought $1.5 billion worth of bitcoin, it caused a stir among supporters of the cryptocurrency.
According to Musk, we sold many of our bitcoin holdings because we needed to increase our cash position since we didn’t know when the covid lockdowns in China would end. “This should not be viewed as some judgment on Bitcoin,” he continued. Musk and CFO Zachary Kirkhorn both affirmed that none of Tesla’s dogecoin had been sold.
Tesla has maintained its soft estimate for a “50 percent average annual increase in vehicle deliveries” over a “multi-year horizon” with two additional plants already operational in Texas and outside of Berlin, Germany.
Tesla continues to list as “in development” the eagerly awaited Cybertruck (announced in November 2019), electric Semi truck (unveiled in November 2017), revised Roadster concept, and other speculative projects like the humanoid robot. Elon Musk stated that Tesla hopes to begin shipping the Cybertruck, a pickup truck that has an experimental appearance, in the middle of next year in answer to a question from an investor on Wednesday.
Inflation Issues
The savage Russian invasion of Ukraine and the Covid outbreaks in China worsened the already existing shortages of semiconductors and parts and other supply chain issues. In the second quarter of 2022, Tesla’s manufacturing in Shanghai was forced to briefly halt or reduce production due to covid limits.
Musk bemoaned the high startup costs for new factories in Austin, Texas, and Grünheide, Brandenburg, Germany, in the latter part of May. Musk described the two new plants as “huge money furnaces” in a conversation with Tesla Owners Silicon Valley, an organization recognized by the firm.
Musk hinted in a tweet earlier this month that Tesla would reduce the cost of its electric vehicles if inflation “calms down.”
Austin and Berlin ramp inefficiencies will continue to have an impact on our profitability for the remainder of the year, Tesla CFO Zachary Kirkhorn said during the company’s earnings call on Wednesday. However, as we increase the ramp, the influence should diminish.
Musk added with optimism, “I anticipate inflation will drop towards the end of this year,” but cautioned investors to take his statement lightly.
On the conference call, executives stated that Tesla is now observing a negative trend for the majority of commodities toward the end of this year or next. Musk acknowledged that there were certain outliers. He declared, “Lithium processing is nuts,” and once more urged businesspeople to get into the lithium refining industry. You cannot fail. It is a permit to print money, he declared.
Tesla Stock Pivots
| Pivot | Classic | Fibonacci | Camarilla | Woodie | DM |
|---|---|---|---|---|---|
| S3 | 364.28 | 530.83 | 627.62 | 431.18 | — |
| S2 | 530.83 | 594.45 | 642.89 | 528.63 | — |
| S1 | 602.12 | 633.75 | 658.15 | 597.73 | 566.48 |
| P | 697.38 | 697.38 | 697.38 | 695.18 | 679.55 |
| R1 | 768.67 | 761.00 | 688.69 | 764.28 | 733.03 |
| R2 | 863.93 | 800.30 | 703.95 | 861.73 | — |
| R3 | 1030.48 | 863.93 | 719.22 | 930.83 | — |
