‘Falling prices boosted demand’: Elon Musk excited for 2023, wants to sell 2 million Teslas – Business AM
Tesla’s quarterly results are out, and they’re beating estimates. Despite a record number of unsold shares, the stock price responded well to end the session on a positive note. According to Musk, price cuts will boost demand strongly at the beginning of the year. He expects a recession, but Tesla will break even this year and set a new production record. It also reports on Cybertruck.
In the news : Tesla’s quarterly results were announced Wednesday through Thursday night.
- With profit $5.77 billion (or $1.19 per share) and a circulation At $24.32 billion, Tesla had a modest profit better than guesswork analysts. Better than the same quarter of 2021: +37% for turnover, +19% for profit.
- The turnover, which mainly consists of the segment of electric vehicles: is 21.3 billion dollars.
- Active the whole yearthat’s double-digit growth of more than 50% over 2021 on $20.85 billion in revenue of $81.46 billion.
1.3 million electric cars were produced, many were not sold
Numbers : a record number of cars produced and sold, but a failed bet for Elon Musk.
- Tesla produced during the quarter 439,701 vehicles (+44% compared to the same quarter in 2021), including 20,613 Model S and X (+57%) and 419,088 Model Y and 3 (+43%). In terms of sales, respectively 405.278 (+31%), 17147 (+46%) and 388131 (+31%).
- That leaves about 35,000 cars unsold. Record. And in contrast to a year ago, where Tesla sold more cars in the quarter than the firm produced (3,000).
- This is also one of the reasons that make the manufacturer to lower their prices: emptying of stocks. Excess reserves always create deflationary pressure.
- It is like this all year round 1,369,611 cars were produced (+47%). Sales: 1,313,851 cars (+40%). And that’s a big difference: 56,000 more cars were produced than sold. In 2021, the difference was negative: 930,000 EVs were produced and 936,000 were sold.
- Finally, it turns out that Musk’s eyes are bigger than his stomach. About a year ago, he claimed that by 2022 Tesla would sell and produce 1.5 million cars.
- But the fact is that investors welcome all these numbers: a few hours after the closing, the share price rose by 5% (the results were published after the “bell” of the stock exchange). It has already gained more than 30% since the beginning of the year.
Tesla and the secret weapon in the recession
The main one : demand is growing, but what are the prospects for 2023?
- “These price changes really make a difference to the average consumer,” Musk said on the earnings call. Reuters. According to him, the demand is increasing: the sales figures are now twice the production.
- For the rest of the year: recession or no recession? For Musk, it will indeed be, he continues. But despite the “difficult recession,” he doesn’t fear for Tesla: “Despite the likely contraction in the overall auto market, demand will be strong. »
- A recession is logistically difficult for automakers because it’s an expensive purchase that consumers might put off. Manufacturers then have to lower prices to continue attracting customers. In addition, raw material prices are likely to rise, especially for EV manufacturers.
- And here Tesla really has an advantage, the “nuclear option”. Its profit margin per car is much higher than that of competitors (seven times that of Toyota, for example), giving it more room to cut prices.
2 million cars in 2023
In the future : Musk sets the bar high.
- The head of Tesla adds that it can produce and sell two million cars in 2023. 50 on average).
- Musk also gives news about Cybertruck. One thing that will disappoint fans: series production is delayed until next year.