Key Takeaways From Tesla’s Q4 2021 Earnings

Electrical carmaker Tesla, Inc. (TSLA) blew previous market expectations yesterday after it reported earnings of $17.7 billion, a 65% enhance from earlier 12 months, and diluted earnings per share (EPS) of $2.54. Analysts had estimated $16.57 billion in income and an EPS of $2.33 for the corporate. Tesla additionally achieved the best working margin amongst all electrical car producers in 2021 at 14.7% and had report earnings of $2.3 billion throughout the fourth quarter. 

Whereas it was largely anticipated, Tesla’s efficiency failed to maneuver the markets. Its high-flying inventory worth fell 5% in after-hours buying and selling and is down roughly 7% from the day’s begin to $870.46, as of this writing.

Listed here are three key takeaways from the corporate’s earnings name.

Provide Chain Issues Will Forestall Tesla From Engaged on New Automotive Fashions in 2022

Tesla CEO Elon Musk informed analysts that the provision chain was a “elementary limiter” to supply throughout its factories. Whereas the corporate devised workarounds to its provide chain shortages throughout the pandemic, it might not have the ability to repeat that efficiency this 12 months. “I’m not positive what you do for an encore to 2021, 2020,” Musk informed analysts. 

The top recreation of provide chain points confronted by Tesla is that the corporate just isn’t planning to work on new fashions this 12 months. That leaves a slew of automobiles, new and updates, within the lurch. The corporate’s much-awaited Cybertruck, which was postponed from final 12 months, now has a 2023 manufacturing date. The Semi truck stays indefinitely postponed. A protracted-awaited replace to the Roadster, Tesla’s first launch, can be not within the playing cards. In response to Musk, the chip scarcity will “alleviate” subsequent 12 months.

“If we have been to introduce new automobiles, our whole car output will lower,” he mentioned throughout the earnings name. As an alternative, the corporate plans to give attention to manufacturing of its current slate of automobiles, which incorporates the Mannequin 3 and Mannequin Y. Collectively, each fashions accounted for 96% of whole manufacturing output throughout the fourth quarter of 2021. Tesla doesn’t present manufacturing steerage, nevertheless it goals for an output enhance of fifty% annually.

Musk’s Choices Train Affected Tesla’s Profitability

Tesla CEO Musk’s train of his choices final 12 months triggered a crash within the firm’s inventory worth. The choices, amounting to roughly $10 billion, ended up with Musk proudly owning extra of the corporate than earlier than and incurring an enormous tax invoice. In addition they affected Tesla’s total revenue. In its fourth quarter 2021 earnings launch, the corporate acknowledged that its promoting, common, and administrative (SG&A) bills had elevated, primarily pushed by $340 million payroll tax on 2012 CEO award choice train.

Why is that this essential? Musk was awarded 101 million choices, topic to Tesla hitting sure monetary targets, in his 2018 pay bundle. To this point, the corporate has achieved seven of these monetary targets, and 5 stay. Analysts anticipate Tesla to realize the remaining 5 both this 12 months or subsequent. Which means Musk ought to get the remaining choices inside the identical timeframe. Nonetheless, he isn’t anticipated to train them till 2028, when the choices expire.

Tesla Is Constructing a Humanoid Robotic 

In true showmanship model attribute of Musk, he introduced yesterday that the corporate will give attention to growing an Optimus humanoid semi-sentient robotic this 12 months. The robotic was first launched to audiences in human kind throughout the firm’s AI Day. It flabbergasted audiences as a result of the presentation featured a human dressed as a robotic and dancing to music. 

However Musk mentioned throughout the current earnings name that the robotic has the potential to be “extra important” than its electrical car enterprise. “If you consider the financial system, it’s—the inspiration of the financial system is labor. Capital tools is distilled labor. So, what occurs should you do not even have a labor scarcity? I am unsure what an financial system even means at that time. That is what Optimus is about, so essential,” he mentioned.

To make sure, Musk has made equally rosy predictions about different components of Tesla’s enterprise, similar to its foray into the insurance coverage trade and the prevalence of a Tesla fleet of robotaxis by 2020. CNBC says the Tesla robotic could possibly be years away and should by no means come to fruition.