Tesla’s second-quarter earnings report reveals a mix of quarterly declines due to production issues and year-over-year growth.
The company reported a quarterly decline in revenue and earnings on Wednesday, blaming supply chain constraints, inflation, and an extended Chinese shutdown for the decline. The company’s share price increased by up to 4% before settling at around 1.45% in after-hours trading.
Tesla’s revenue in the second quarter was $16.9 billion, down from $18.8 billion in the first quarter. The revenue figures for the second quarter were also lower than the $17.7 billion it brought in the fourth quarter of 2021.
Tesla reported a second-quarter profit of $2.3 billion, or $1.95 per share, down from $3.3 billion in the first quarter.
Despite the sequential decline, Tesla’s year-over-year results were far brighter, with revenue increasing 42 percent from $11.96 billion in Q1 2021. Profits nearly doubled from $1.14 billion, or $1.02 per share, in the same period in 2021.
According to Yahoo Finance, analysts expect Tesla to generate $17.2 billion in revenue and $1.85 in earnings per share in the second quarter of 2022. Tesla reported $11.96 billion in revenue and $1.45 in earnings per share for the second quarter of 2021.
Despite certain challenges, such as limited production and shutdowns in Shanghai for the majority of the quarter, the company noted that it continued to make significant progress across the business during the second quarter of 2022.
The company’s bottom line was pulled in two directions: it was helped by selling its EVs at a higher price and selling $344 million in regulatory credits, while inflation and other costs cut into its automotive margins. Tesla’s automotive margins fell to 27.9 percent, down from 32.9 percent in the previous quarter and 28.4 percent in the fourth quarter.
Musk has repeatedly stated that production, not demand, is the primary impediment to the company’s growth.
“Right now, our main issue is production,” Musk said during the call. “So, we have long leads on — as anyone who orders a car can tell — if you order a Model Y, it will arrive sometime next year.” So for many months, this is clearly not an issue (referring to demand). Our problem is overwhelmingly one of production.”
Despite these issues, Musk attempted to highlight some of the company’s accomplishments, such as the fact that it ended the quarter with the highest vehicle production month in its history as its Shanghai factory reopened and its new facilities in Berlin and Austin ramped up.
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Tesla also disclosed that it sold 75% of its Bitcoin holdings this quarter. The company appears to have lost around $150 million on its cryptocurrency bet since purchasing the coins in 2021, selling them for $963 million. Tesla stated that the remaining “digital assets” are worth $218 million.
Tesla also provided a few other updates, such as maintaining the cybertruck’s production launch date of mid-2023 and forecasting a planned increase in the cost of its FSD beta software. The company did not provide an update on its electric Semi truck or Roadster, which were both introduced as concepts in December 2017.