Electric vehicle giant reports fourth-quarter earnings and earnings; Cybertruck production to start later this year

Electric vehicle giant reports fourth-quarter earnings and earnings;  Cybertruck production to start later this year

Tesla shares are trading slightly higher after hours after the electric car maker reported fourth-quarter earnings and earnings. In addition, the company announced that its Cybertruck will enter production later this year.

For the quarter, Tesla (TSLA) reported:

This revenue represents another record for Tesla, up more than $2 billion consecutively from the third quarter and nearly $7 billion year-over-year.

In terms of profitability, Tesla reports $4.1 billion in adjusted net income, nearly $400 million more than in the third quarter and more than $1.3 billion more than a year ago. Tesla said it has “enough liquidity” to fund its roadmap and capacity expansion plans.

Gross margin was 23.8% (est. 25.4%) and gross margin for cars was 25.9% (est. 28.4%). Although Tesla introduced a number of price cuts in the US, China (for the second time), and some European markets, these cuts did not occur until the first quarter of this year, so these effects are not visible in the fourth quarter results.

CEO Elon Musk reached out to investors with questions about demand, saying the recent price cuts have boosted demand significantly. “So far, January has seen the strongest YTD bookings in our history,” Musk said.

Tesla said it can maintain margins despite falling ASP (average selling price), as proven over the years, by using “cheaper models, building localized more efficient factories, reducing vehicle costs and operating leverage.” Chief Financial Officer Zach Kirkhorn said by phone that Tesla expects to retain 20% of gross margins from automobiles despite recent price cuts, which would actually be significantly less than Tesla reported in the fourth quarter.

Tesla has maintained its long-term shipment target at a 50% CAGR (compound annual growth rate) despite shipments having fallen short in recent quarters. “In 2023, we expect to be ahead of a long-term 50% CAGR of about 1.8 million vehicles per year,” the company said in a quarterly report.

Tesla said its production and shipping issues in 2022 are “mostly concentrated in China” but mostly “operating near full capacity for months.” Tesla does not expect a significant increase in Giga Shanghai volumes in the near future.

Tesla also revealed that production of the Cybertruck is due to begin later this year, with its next-generation platform in the pipeline, with more details to be revealed at an investor day on March 1st. Regarding Cybertruck, Musk noted that “Cybertruck won’t be a significant contributor to bottom line, but it will be next year.” Musk explained that production of the Cybertruck will begin this summer, with mass production starting in 2024.

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and beyond Instagram.

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