Elon Musk: Tesla ought to produce over 1.5 million vehicles in 2022 | ZDNet


Tesla

After a blockbuster first quarter for Tesla, with document revenues and automobile deliveries in Q1 2022, “it appears possible we’ll be capable to produce over 1.5 million vehicles this yr,” Tesla CEO Elon Musk mentioned Wednesday throughout a convention name. 

The forecast comes regardless of the acknowledgement that the corporate will face severe challenges for the remainder of the yr. 

The document outcomes have been achieved “regardless of loads of chip shortages, many logistics challenges and an general tough quarter,” Musk mentioned. “We stay assured of progress in automobile manufacturing in 2022 versus 21. We even have an inexpensive shot at a 60% enhance over final yr.”

Provide chain challenges have stored Tesla’s factories operating under capability for a number of quarters, and the corporate doesn’t see the state of affairs enhancing this yr. 

“We plan to develop our manufacturing capability as shortly as doable,” Tesla mentioned in its Q1 slide deck, including that over a multi-year horizon, it expects to realize 50% common annual progress in automobile deliveries. 

“The speed of progress will depend upon our tools capability, operational effectivity and the capability and stability of the availability chain,” it continued. “Our personal factories have been operating under capability for a number of quarters as provide chain grew to become the principle limiting issue, which is more likely to proceed by way of the remainder of 2022.”

To make sure, the challenges it’s confronted this yr didn’t cease Tesla from having a stellar quarter. Earlier this month, Tesla introduced it produced greater than 305,000 automobiles and delivered greater than 310,000 automobiles in Q1. That quantities to a 68% year-over-year enhance in deliveries.

Whole income got here to $18.76 billion, up a whopping 81% year-over-year. Non-GAAP earnings per share (EPS) have been $3.22, up 246% year-over-year. These numbers eclipsed market expectations. 

In the meantime, Tesla’s working margin in Q1 shot as much as 19%, which places the corporate on par with supercar firms although it’s promoting sedans and SUVs.

That mentioned, the corporate is up towards extra than simply provide chain disruptions. Transportation, labor and different manufacturing challenges have come into play and are more likely to have an effect on the enterprise by way of the yr. 

Whereas weekly manufacturing charges at Tesla’s Shanghai manufacturing unit have been robust in Q1, a spike in COVID-19 instances compelled a short lived shutdown of the manufacturing unit in addition to elements of Tesla’s

provide chain. Given the state of affairs in Shanghai, Tesla confirmed Wednesday it misplaced a couple of month of construct quantity. The corporate confirmed that restricted manufacturing has not too long ago restarted, and it continues to observe the state of affairs carefully. It expects to be again to complete construct and supply quantity in Q2.

Amid these ongoing challenges, automobile manufacturing in Q2 will probably be just like Q1, Musk mentioned Wednesday, including, “perhaps barely decrease.” Nonetheless, manufacturing within the second half of the yr ought to be “considerably greater,” the CEO mentioned. 

“I’ve by no means been extra optimistic or enthusiastic about Tesla’s future than I’m proper now,” he mentioned.

Musk additionally mentioned the influence of inflation on the value of Tesla automobiles, noting that “suppliers are below extreme price stress,” in some instances requesting 20% to 30% will increase for elements. On condition that inflation “seems more likely to proceed for at the least the rest of this yr,” he continued, “that’s why we raised our costs.” 

Greater costs account for the truth that Tesla has orders that exit a yr or extra in some instances, he defined. “We’ve got to anticipate these price will increase.”

Musk continued, “What’s retaining prices down at the least within the brief time period is that we now have longterm contracts with suppliers. However these will run out after which we’ll begin to see doubtlessly vital price will increase.” 

The CEO mentioned he doesn’t anticipate elevating costs additional, and that if possible price will increase don’t materialize, the corporate may very well decrease costs barely.

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