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Quarterly resultsTesla doubles its profits but continues to worry
Investors are wondering if demand for the US automaker’s electric vehicles can continue to rise.
Tesla assures that if it produced some 20,000 more vehicles than it delivered in the third quarter, it is to be put down to the difficulties of delivery to customers.
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Tesla reported strong financial results once more on Wednesday, but investors continue to question continued demand for fairly expensive electric vehicles as well as Elon Musk’s tribulations with Twitter.
The group doubled its net profit in the third quarter, to 3.3 billion dollars, very close to its record reached in the first quarter. It benefited from an increase in its deliveries as well as the increase in the prices of its vehicles. Its turnover for its part jumped 56% to reach 21.4 billion dollars, a level never reached before but a little lower than analysts’ forecasts.
The group points out that its performance was held back by the strengthening of the dollar, higher costs for raw materials and logistics, as well as the expenses associated with the ramp-up of its new factories in Berlin, Austin (Texas) , and battery production. “Investors are mainly looking for assurance that growth will continue in the fourth quarter,” notes Garrett Nelson of CFRA.
Tesla has, in this respect, maintained its long-term objective of growth in deliveries of 50% on average per year. However, this objective seems complicated to achieve in 2022. The group would have to deliver nearly half a million electric vehicles in the fourth quarter to achieve this, compared to 344,000 in the third quarter.
Immediate challenges
Tesla says it is ramping up production “as quickly as possible.” With the exception of the second quarter, marked by the closure of its Chinese factory, the company has in fact managed to increase its deliveries since the start of the pandemic when the other manufacturers have sometimes had to slow down their production, first to fight once morest the spread of Covid-19 and then because of the difficulties in supplying semiconductors.
But “logistics volatility and supply chain bottlenecks remain immediate challenges, even as they improve,” the group points out. Elon Musk’s company also ensures that if it produced some 20,000 more vehicles than it delivered in the third quarter, it is to be put down to the difficulties of delivery to customers.
An explanation that did not really reassure observers, some wondering if it was not rather a sign of a slowdown in demand. Elon Musk has so far assured that he is not worried regarding this side, the waiting lists remaining long and the main problem remaining to build enough cars to quickly respond to orders.
Takeover of Twitter
But mortgage rates are soaring, the economy is slowing, and the cheapest Tesla costs $48,490. Observers therefore wonder whether customers will continue to want such expensive cars. These concerns have contributed to the decline in Tesla’s stock, which has lost more than 35% since the start of the year.
The title is also affected by the gloomy atmosphere on the financial markets as well as by the fear that Elon Musk will have to sell even more of his shares to finance his takeover of Twitter. The multibillionaire has already sold more than $15 billion of its Tesla shares this year, indicating that at least part of it was intended to finance this acquisition if it were to be confirmed.
In the latest episode of this saga, the judge in charge of litigation between Twitter and Elon Musk has given until October 28 to both parties for the boss of Tesla to buy the social network, failing which the trial will be held in November. .
(AFP)