Tesla's share price fell about 4% after trading on Wall Street, Wednesday (19/10/2022). Although Tesla's positive performance was supported by electric car sales, it was still below market expectations.
The company posted GAAP profit in Q3-2022 of $3.3 billion, up 103% over the same period last year, total and revenue of $21.45 billion, up 56%. Revenue performance was lower than Refinitiv's expectations of US$ 21.96 billion. Two weeks earlier, the electric car maker said it was producing 22,000 more vehicles than it sold, signaling that the company was unable to sustain demand.
CEO Elon Musk said he remains optimistic that demand for electric cars remains strong.
“I can't stress enough that we had excellent demand for Q4 and we look forward to selling every car we make,” Musk said. “The factories are running at full speed and shipping every car we make.”
Revenue from car sales for QIII-2022 was US$ 18.69 billion, up 55 percent over the same period the previous year, while gross profit from car sales was US$ 5.2 billion, up 42 percent. Profit margin of 27.9% or the same as the previous quarter.
Tesla's electric car production in QIII-2022 was 365,923 units, up 54%, while shipments reached 343,840 units, up 42% over the same period last year.
The company said the weak delivery was due to transportation problems and said in its earnings report that logistics costs had become increasingly expensive.
Wall Street expects the company to report $3.9 million in profit and $21.96 billion in revenue on Wednesday. Although the company failed to live up to market expectations, its financial reports show that Tesla was able to recover from a shaky second quarter of 2022 following the closure of its Shanghai plant and slowing production.
“We're looking forward to a record-breaking Q4,” Musk said.
Musk said Tesla could eventually become more valuable than Apple and Saudi Aramco, the world's two most valuable companies combined. It won't be easy, Musk admits.
The board is also reviewing the possibility of buying back $5 billion to $10 billion of stock next year.
While some analysts remain optimistic about Tesla's growth, they caution that the company needs to be cautious about how much higher vehicle prices will be given the broader economic slowdown.