Tesla said on Wednesday it made a profit of $3.3 billion in the first three months of the year, up from $438 million a year ago, but the company also said it expects its factories to run below capacity in the remainder of 2022.
The automaker said its first-quarter revenue totaled $18.8 billion, up from $10.4 billion a year earlier. The profit significantly exceeded investor expectations.
Tesla was the fastest-growing automaker last year, nearly doubling sales to nearly a million vehicles as the industry as a whole plummeted. New factories near Austin, Texas and Berlin position the company to repeat that growth this year – if it can overcome some serious challenges.
That includes a semiconductor shortage that has plagued automakers for more than a year. Tesla also had to close its factory in Shanghai because of China’s draconian attempts to contain the coronavirus. China accounted for a quarter of Tesla’s sales last year, and the factory in Shanghai also exports cars to other countries in Asia and Europe.
Tesla said on Wednesday it had resumed “limited production” in Shanghai after a three-week shutdown. But it warned that it continues to face “persistent” supply chain problems, as well as rising raw material costs.
“Our own factories have been running below capacity for several quarters as the supply chain has become the main limiting factor, which will likely continue through the rest of 2022,” Tesla said in a statement.
Analysts said problems in the supply chain and production could hamper the company’s growth this year. Tesla said it aims to increase vehicle sales by about 50% a year over the next few years.
“A robust demand story for Tesla is being overshadowed by brutal production problems in China as well as a Rubik’s Cube supply chain that continues to haunt Tesla and the rest of the auto/tech industry,” analysts said. from Wedbush Securities in a statement. note to customers ahead of Tesla’s first quarter earnings announcement.
Tesla remains by far the biggest maker of battery-powered cars. During the first three months of 2022, it sold 310,000 vehicles, an increase of nearly 70% over the previous year. But traditional automakers like Volkswagen, Ford Motor and Hyundai Motor have woken up to the threat and started selling models that challenge Tesla’s dominance.
There’s also a risk that Elon Musk, Tesla’s chief executive, could alienate some car buyers with his high-profile bid to buy Twitter. Some potential customers might applaud Musk as a free speech advocate, but others might fear he will open up Twitter to hate speech and misinformation.