The closely watched fourth-quarter earnings season kicked off this week. Unlike the tragic battle that many people had expected, so far, the news coming out from the big companies is pretty good.
Although yesterday's financial report of Microsoft's revenue and profits were lower than expected and the growth rate further slowed down, the strength of the cloud services and productivity business sectors allowed Microsoft's stock price to still withstand the pressure. Today, Tesla fourth quarter financial report was announced. After being deeply involved in price cuts and public opinion turmoil, Tesla unexpectedly handed over a surprising report card to the market.
However, a series of recent lawsuits and challenges surrounding Musk are still coming one after another.
｜Tesla’s revenue and profit reached a new high, with annual delivery of more than 1.3 million vehicles
At the end of last year, Tesla launched a series of price reduction promotions around the world. This move made many investors suspect that Tesla’s fourth quarter performance was far from meeting the standards. In addition, due to the superposition of multiple factors such as the market environment and Musk's turmoil, Tesla's stock price has fallen all the way to the lowest point in recent years.
But today, the financial report shows that Tesla’s various data are quite stable, and its revenue and profit once again hit a new high. 's operating income in the fourth quarter was US$24.318 billion, a year-on-year increase of 37%, higher than the market expectation of US$24.07 billion; the adjusted net profit in the fourth quarter was US$4.106 billion, a year-on-year increase of 43%; net income per share was US$1.19, a year-on-year increase of 40%, which not only refreshed the previous record of US$1.07 but also exceeded market expectations of US$1.12.
In terms of vehicle delivery, Tesla’s car production and delivery volume have also reached new highs. A total of 439,701 vehicles were produced and 405,278 vehicles were delivered in the fourth quarter, a year-on-year increase of 44% and 31% respectively. This means that Tesla's full-year production and delivery volume in 2022 has exceeded the 1.3 million mark, with annual output increasing by 47% year-on-year and delivery increasing by 40% year-on-year.
Tesla said that in the fourth quarter, the output of factories around the world hit their respective quarterly highs, thus balancing production and delivery volumes in various locations.
From a business perspective, the automotive business revenue was US$21.307 billion, a year-on-year increase of 33%. The most outstanding thing this time is the carbon sales business, with revenue reaching US$467 million, a 63.3% increase from the third quarter.
But Tesla’s earnings report this quarter wasn’t all good news. is first of all a significant decline in profit margins. The company's overall gross profit margin in the fourth quarter was 23.8%, down 1.3 percentage points from the third quarter. The gross profit margin of the automotive business dropped from 27.9% in the third quarter to 25.9%, which was significantly lower than market expectations.
In addition, free cash flow fell 49% year-on-year to $1.42 billion, far lower than analysts’ expectations of $3.13 billion. In the fourth quarter, foreign exchange had a negative impact on Tesla's revenue of US$1.4 billion and a negative impact on profits of more than US$300 million, which was 20% lower than the previous quarter.
But in terms of his outlook for 2023, Musk was very positive this time. He said January saw Tesla’s strongest order growth to date, nearly doubling production rates. In addition, he expects profits from the software to accelerate. During the conference call, Tesla also stated that the Cybertruck pickup truck is expected to officially begin mass production in 2024. The company is developing a next-generation vehicle platform and will disclose more details to investors on March 1.
Positively affected by the financial report and expectations, Tesla's stock price rose by more than 5% after the market closed.
| A troubled Musk is deeply involved in Tesla litigation and fraud
Although he handed over a good quarterly financial report, Musk currently has far more to worry about than Tesla's performance. Last Friday, the class action lawsuit case against Musk, who was accused of securities fraud, officially opened in California, USA. The case mainly involves Musk's tweets about taking Tesla private in 2018, which triggered violent fluctuations in Tesla's stock price.
During the recent court hearing, Musk was questioned and revealed more about what happened after this tweet.
In August 2018, Musk tweeted about his plan to privatize Tesla at $420 per share, saying that he had received support and confirmation from investors and that the funds had been in place.Just when the market thought Tesla was going to be privatized soon, Musk unexpectedly issued an open letter more than a week later stating that he would give up privatization. From time to time, Tesla's stock price rose and fell sharply, and a large number of investors suffered huge losses.
After the incident, Musk was forced to resign as chairman of Tesla by the U.S. regulatory agency Securities and Exchange Commission, and Tesla was asked to set up a separate independent committee to review any tweets by Musk related to Tesla. In addition, he and Tesla were each fined $20 million. Tesla also collectively sued Musk for securities fraud.
During the court hearings over the past few days, Musk denied all accusations of fraud and instead dumped the blame on Saudi Arabia Sovereign Wealth Fund.
He said that he had indeed reached a verbal agreement with Yasser al-Rumayan, the president of the Saudi sovereign wealth fund "Public Investment Fund", which clearly wanted Tesla to be privatized and said it could provide it with tens of billions of dollars in funding. After receiving a commitment from Saudi Arabia, he was fully confident about privatizing Tesla before posting that tweet.
Musk added that even without Saudi funds, he still had enough money to promote the privatization of Tesla at that time, including the sale of SpaceX stocks, and various financial supports from Oracle and SoftBank. Therefore, he was not intending to commit "fraud" at the time.
Musk believed that the information he tweeted at the time should be heard by the public, especially the retail investors group. However, due to the length limit of 240 characters on Twitter, the transmission of information was limited, but that was also clear to everyone.
In addition, Musk denied in court that the reason why the privatization offer was set at US$420 per share as reported by the media at the time was because April 20 was International Cannabis Day. He said that this statement was highly misleading. The $420 price was not a joke, but the Tesla stock price when he made the offer was exactly $420 after a 20% premium.
Although Musk frantically blamed his innocence during the trial, he was obviously vague on some key issues. For example, whether Saudi Arabia has given a more substantial commitment, the specific situation of the meeting between Musk and the Saudi Public Investment Fund, the transaction structure, etc. Musk said that "it has been too long and I can't remember it." At the same time, he also admitted that he had never discussed the specific investment amount with Saudi Arabia. The trial is still continuing. Once found guilty, Musk may have to pay billions of dollars in compensation for this incident.
In addition to the lawsuit, Musk was recently accused of participating in Tesla's self-driving video fraud.
Recently, Ashok Elluswamy, Tesla’s director of autonomous driving software, said that a video used by Tesla in 2016 to promote its autonomous driving technology was not real autonomous driving, but was produced using post-processing technology. Musk was fully aware of the entire process and personally instructed his employees to "fakes."
Tesla employees disclosed that in order to make this video, the company used 3D mapping on the predetermined route, and the driver also intervened during the test. The Tesla cars at the time did not actually have functions such as automatic parking and acceleration at red lights. While trying to get Model X to park itself without a driver, a test car crashed into a fence in a Tesla parking lot, but Tesla removed that part of the video and edited it.
During the video preparation process, Musk personally wrote an email titled "Top Priority" to the Tesla Autopilot team, telling employees that their first priority was to make an amazing self-driving demonstration video, and made it clear that certain places could be encoded in the demonstration video. After the
video was produced, it was placed on Tesla’s official platform, and Musk also forwarded it. Although it was known that Tesla at the time did not have the autonomous driving capabilities demonstrated in the video, neither Tesla officials nor Musk made any explanation for the technical editing of the video. The video has been removed from the shelves overnight by Tesla.
Although Tesla’s Autopilot has been controversial in the past few years, this is the first time that a Tesla employee has confirmed and exposed Tesla’s self-driving propaganda fraud in detail.
| His net worth has evaporated by 200 billion, and 100 bodyguards have been protecting him 24 hours a day.
In the past year, Musk has suffered a Waterloo-style crisis, and all kinds of bad things have happened one after another.
After his assets became the world's richest man at the beginning of 2021, and after his assets reached a peak of US$340 billion in November of that year, his net asset loss exceeded US$200 billion in more than a year, setting a Guinness World Record for the largest personal wealth loss.
Not only has his wealth shrunk, but Musk's personal reputation has also plummeted in the series of farce over the acquisition of Twitter, which is no less troublesome than Tesla. The latest news shows that SRI Nine Market Square LLC, the landlord of Twitter headquarters in San Francisco, has officially launched a lawsuit against Twitter, claiming that Twitter owed nearly $7 million in rent in December last year and January this year.
The property said Twitter violated the terms of its lease in December and failed to pay nearly $3.4 million in monthly rent, which they recovered from Twitter's security deposit. But in January this year, the landlord continued to violate the lease and defaulted on rent. After withdrawing the remaining $266,000 in credit, Twitter currently owes $3.16 million in rent. In addition to the San Francisco office, the Twitter office in London is also owed rent.
In addition, the "bloody" layoffs initiated by Musk after taking over Twitter have also triggered a class action lawsuit recently initiated by affected employees.
Musk has also recently felt uneasy about his personal safety amid a series of turmoil at Tesla and Twitter.
Recently, Musk’s father, Errol, said in an interview that in order to ensure his personal safety, Musk had comprehensively upgraded the security of his home in South Africa, installed a large number of cameras and security facilities, and hired about 100 bodyguards to be on duty 24 hours a day to strictly prevent kidnappings.
According to Errol, Musk’s own security measures are even stricter, and he has more than 100 bodyguards around him for personal protection at all times. Just a month ago, Musk said in a discussion on Space that he was at high risk of being assassinated and would never participate in any parade in an open-top car.
Note: The cover image comes from the Google public copyright library, and the copyright belongs to the original author. If you do not agree to the use, please contact us as soon as possible and we will delete it immediately.
