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Tesla's Q2, 2022, Big Prelude to Strong Q3 and Q4

Tesla had some challenges in Q2, 2022, but still exceeded expectations. Despite a month long shut down in Giga Shanghai, Tesla remains on track to grow 50% each year.


Tesla's Q2, 2022, Big Prelude to Strong Q3 and Q4

Here are the highlights from Q2, 2022, and the Tesla earnings call. All of this is despite a month shut down in Giga Shanghai and continued supply chain challenges.

Tesla increased their cash position to $18.3 billion with profits from the sale of electric vehicles as well as selling 75% of their Bitcoin holdings.

Tesla's profitability showed a $2.5 billion GAAP operating income and a 14.6% operating margin. Tesla had a $2.3 billion GAAP net income and a $2.6 billion non-GAAP net income. They achieved a 27.9% GAAP automotive gross margin.

More than 1,000 vehicles were produced in a single week at Gigafactory Berlin. There was also the highest solar deployment done in over four years.

These are all good signals and indicators of a strong second half of the year for Tesla, assuming there are no more shut downs of factories due to any issues. Tesla opened Giga Berlin and Giga Texas this year. Tesla lost around 100,000 vehicles made in Q2, 2022 due to the shut down of Giga Shanghai. Tesla also had their highest production month in June, 2022.

Tesla remains production constrained for production and storage.

A Strong Prelude for Q3 and Q4

Tesla still managed to grow automotive revenues 43% year over year. Solar deployments were 106 MW, the highest in 4 years. Tesla deployed 1,133 MWh of storage for energy. Tesla's installed annual capacity is about 1.9 million units today.

There is a greater than 750,000 vehicles from Giga Shanghai, and a greater than 250,000 vehicles for Giga Berlin and a greater than 250,000 vehicles from Giga Berlin.

Tesla's market share continues to grow rapidly. Ever since Q4 of 2018, Tesla has gone from about 0.3% to around 1.5% to 3% globally - this is for all vehicle sales globally. Imagine another 5 to 10 times increase of this in 2026. That would put Tesla at around 7.5% to 30%, depending on where in the world Tesla's are being sold, as a leader in market share.

For FSD (full self-driving), over 100,000 Tesla drivers in North America had access to Tesla FSD beta. Vehicle software continues to be strong for Tesla. Vehicles with adaptive suspension in North America can now automatically adjust to a more comfortable ride height before encountering a section of rough road, informed by continuously-updated data collected by their fleet.

For battery power, thanks to large castings and parts consolidation, the robot count in Tesla's body shops and new factories dropped by over 70% per unit of capacity compared to their first iteration of Model 3 body shops.

Ever since September of 2021, FSD has grown in cumulative miles driven from close to 0 to about 40 million miles now. Tesla has also continued to reduce robots from Fremont to Giga Texas and to Giga Berlin. There are less parts, robots, and processes being used to make cars.

When I look at the coming quarters for this year, you will see continued growth from Giga Berlin and Giga Texas. Tesla continues to grow rapidly in trailing twelve month metrics for vehicle deliveries, cash flows, net income, and EBITDA. It's pretty clear which direction Tesla is heading.

What do you think about Tesla's Q2, 2022? Will there be more shut downs in the future for Tesla's factories?

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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter or LinkedIn to stay in touch and follow his Tesla news coverage on Torque News.

Image Credit, Tesla Gallery, Screenshot