"I think the value of Tesla may exceed the sum of Apple and Saudi Aramco (referring to Saudi Arabian national oil company , the world's largest oil production company)." Musk once again drew a big pie at the financial report meeting.
On October 20, 2022, Tesla released its third quarter financial report for 2022. Judging from the financial report data, Tesla's Q3 data are very impressive, and many data hit quarterly highs. Specifically:
- 's total revenue in the third quarter reached US$21.5 billion, and increased by 56% year-on-year;
- 's GAAP operating profit in the third quarter was US$3.7 billion, and the operating profit margin was 17.2%;
- 's GAAP net profit in the third quarter was US$3.3 billion, and non-GAAP net profit (not counting the share payment fee) was US$3.7 billion;
- 's GAAP automobile gross profit margin in the third quarter was 27.9%;
- delivered more than 343,000 cars in the third quarter, achieving the highest quarterly production and sales record in history.
Tesla Q3 financial report data at a glance
However, the impressive revenue data did not meet the expectations of Wall Street , and in the context of supply chain risks, unstable international situation, and weak global economy, Wall Street analysts expressed concerns about Tesla's market demand.
As of the close of October 19, Tesla's stock price remained at $222.04, less than the level of $300 in the same period last year.
's revenue hit a new high, but it did not meet expectations
In the third quarter of 2022, Tesla's total revenue reached US$21.5 billion, a year-on-year increase of 56%; operating profit increased to US$3.7 billion year-on-year, with an operating profit margin of 17.2%.
operating cash flow and free cash flow data performance (unit: billion US dollars)
cash flow, Tesla's cash, cash equivalents and short-term securities increased by US$2.2 billion in the third quarter to US$21.1 billion. The increase was largely due to $3.3 billion in free cash flow, partially offset by $900 million in debt repayment.
It is worth mentioning that Tesla has achieved profitability for 13 consecutive quarters, and its revenue, operating profit and free cash flow performance have also set new historical quarterly highs. But even so, revenue figures for the third quarter of 2022 were lower than analysts’ expectations of $22.09 billion.
Tesla said that the increase in revenue and operating profits was mainly due to the increase in car delivery volume in the third quarter and the increase in average vehicle sales prices year-on-year. However, under the multiple challenges caused by the inflation rate of raw material costs, the Berlin Gigafactory, the Texas Gigafactory, and the 4680 battery production climb, the profit margin has also been partially affected.
new record of production and sales, but delivery volume target is difficult to achieve
From the vehicle delivery data, Tesla produced 365,000 cars worldwide in the third quarter of 2022 and delivered 343,000 cars, a year-on-year increase of 42.4% and a month-on-month increase of 34.9%, setting a quarterly production and sales record.
Car delivery volume (unit: million vehicles)
Tesla said that the difference between production and delivery is 20,000 yuan because the large-scale delivery at the end of the quarter has increased transportation costs and logistics instability, and a large number of vehicles are still in the process of transportation.
Judging from the factory performance, Shanghai Super Factory is undoubtedly the biggest contributor - the cumulative delivery volume from January to September reached 483,074 vehicles, close to the annual delivery figures for 2021. In August this year, Shanghai Super Factory also reached a milestone of 1 million complete vehicles being rolled off the line.
It is worth noting that Tesla CFO Zachary Kirkhorn lowered its car delivery expectations this year. He said, "Due to the increase in the number of car orders during transportation (undelivered) at the end of the year, the expected growth in delivery volume is slightly less than 50%.
Based on the data on delivering 936,000 cars in 2021, Tesla needs to deliver more than 1.4 million vehicles this year to achieve a 50% growth. That is to say, Tesla will need to deliver more than 490,000 vehicles in the fourth quarter.
Texas factory
Considering that the fourth quarter is a high delivery period and that the Texas Gigafactory and Berlin Gigafactory are on track, Tesla's delivery volume will usher in a leap, but Tesla faces not small challenges to the uncertainty brought by the supply chain and the epidemic.
Morgan Stanley analyst Adam Jonas adjusted his expectations to lower Tesla's annual delivery forecast from 1.37 million vehicles to 1.31 million vehicles, while the full-year forecast for 2023 dropped from 2 million to 1.8 million vehicles.
In addition to vehicle delivery performance, Tesla revealed in its financial report that the production of Cybertruck has entered the equipment debugging process, and the electric truck Semi has entered the early production stage, not using 4680 batteries. When loading heavy objects, the endurance will reach 800 kilometers. The first delivery plan for
Semi will be opened in December 2022. Musk said he hopes to produce 50,000 Semi trucks in North America by 2024.
Not only that, Musk also revealed that he is developing a third-generation automotive platform, and the cost of the new model will be half of the Model 3/Y, and the size is smaller. Musk said, "The sales of this car will exceed the total output of all other vehicles."
Musk has too many things, and analysts say they are worried that
is different from Musk's ambitions. Based on the overall analysis of the unstable international situation and weak global economy, the market has expressed concerns about Tesla's future growth situation and market demand. "Tesla's quarterly results show that the growing macroeconomic uncertainty is having a certain impact on its electric car demand."
From the perspective of the capital market, Tesla's market value loss this year has exceeded one-third. Musk said on the earnings call that Tesla's board of directors has discussed a $5 billion to $10 billion buyback plan.
"We have had a wide debate on the idea of repurchase at the board level. The board generally believes that it makes sense to do stock repurchases, and we want to do them through the right procedures, but given the very tough situation next year, we are likely to do repurchases of $5 billion to $10 billion in the context of a downturn." He added, "This obviously remains to be evaluated and approved by the board. Therefore, we are likely to do some meaningful repurchases."
Concerns about the downturn affecting automotive demand, Musk said that even if the U.S. economy falls into a severe recession in 2023, companies can still earn considerable revenue.
However, the market's concerns about Tesla are not only due to the economic turmoil caused by the international situation, but also stem from some of Musk's "unprofessional" behaviors, including but not limited to the acquisition of Twitter, R&D robots, etc.
Wedbush analyst Dan Ives said, "In the eyes of investors, their patience with Musk is exhausted. In the critical period of market turmoil, robots are not what Wall Street cares about now."
On the earnings call, Musk said that he was considering merging all the companies into X holding companies. "I don't know what conditions should be done. I'm excited about the acquisition of Twitter." Not only that, Musk also set a new goal for Tesla - Tesla's market value exceeds the sum of Apple and Saudi oil giant Saudi Aramco.
"Now, my point is that we can far exceed Apple's current market value. I think Tesla's value may exceed Apple and Saudi Aramco combined," Musk said.
As of press time, Apple's market value is US$2.3 trillion, Saudi Aramco has US$2 trillion, and Tesla's market value is less than US$700 billion.
