Everyone expected that after seeing the latest sales and production records, Tesla would suffer a small break in profits after consecutive years with positive numbers, but fortunately that is not the situation. The Austin brand has done more with less, proving that it makes ample profit margins on every single unit sold. At the end of the second quarter of 2022, Tesla doubles profits as compared to the same period of the previous year, a course that was extremely convenient for the coffers of Elon Musk's company.
As a matter of fact, the start of the year has not been easy for Tesla: the situation in Europe and the health problems (new COVID outbreake) in China forced the closure of the Shanghai Gigafactory for a few weeks. The Asian plant produces the most cars among all Tesla plants, and a several-day stoppage basically wreaked havoc on quarterly delivery and production figures: 15.3% fewer units produced and a total of 254,695 units delivered in the last quarter. Somewhat lower figures, but positive after all.
At Tesla they trust that they will be able to continue with the streak accumulated in recent years, despite the setbacks in the market. The goal is to exceed one million units delivered throughout the last quarter of the year, something that seems feasible despite the complicated global economic situation. During these months, Tesla has been increasing the price of its cars in the face of rising prices for raw materials, transport and energy. That strategy has not only allowed it to maintain good profit margins, but also to expand them in the second quarter.
With a positive final result of 2,300 million dollars, it basically represents an increase of 98% with respect to the same period of the previous year. Despite the positive number, it represents earnings lower than those of the first quarter though, which reached a record of 3,300 million dollars. The bulk of sales is focused on the Tesla Model 3 and the Tesla Model Y - the combined sum of sales represents almost 94% of the total - while the company's most expensive models (X and S) continue to see a clear slowdown in sales. Elon Musk is not worried about this though, since the two best-selling models are able to completely support the structure of the company.
Within the quarterly results report, surprising news about Tesla's investment in Bitcoin should be highlighted. Throughout the last quarter, the Austin company got rid of 75% of the bitcoin cryptocurrencies, which has meant a positive surplus of 936 million dollars in the general balance. It is interesting to note that, for years now, Tesla has been pouring vast amounts of money into Bitcoin, fueling vehicle payments using the cryptocurrency.
If we focus on Europe, the Tesla division continues to reap excellent performance data. A report published a few days ago highlighted a net profit of 1.73 million euros at the end of 2021 in Spain, an increase of 75.2% as compared to the previous year. The total turnover was more than 155 million euros, which allows us to estimate a profit of around 542 euros per registered vehicle. It is expected that for this year the final figures will be even better, although with reduced spirits taking into account the two-week break in the Brandenburg Gigafactory.
All images courtesy of Tesla Inc.
Nico Caballero is the VP of Finance of Cogency Power, specializing in solar energy. He also holds a Diploma in Electric Cars from Delft University of Technology in the Netherlands, and enjoys doing research about Tesla and EV batteries. He can be reached at @NicoTorqueNews on Twitter. Nico covers Tesla and electric vehicle latest happenings at Torque News.