Tesla profits rocket despite price cuts as electric car giant announces £3bn gigafactory expansion plan
Tesla reported record-breaking results following its highest-ever number of vehicle deliveries.
The electric car maker revealed a profit of £11.4billion for 2022, up 85 per cent year-on-year, while revenues rose 51 per cent to £65.7billion.
It followed a fourth quarter profit for the group of £3.3billion, 43 per cent higher than 2021 and beating market expectations.
Expansion: Tesla will inject over £2.9bn into its Nevada site to construct two new factories, one to build its long-awaited electric semi-truck (pictured) and another for its 4680 battery
The results came after the firm delivered a record 405,278 electric cars in the final three months of the year. Some 439,701 vehicles rolled off its production lines in the period, also an all-time high.
The numbers meant Tesla’s delivery figures for 2022 hit a record of over 1.3m as the firm kicked off production at new factories in Texas and Germany.
The results followed a series of steep price cuts from Tesla in the US, Europe and China as it looks to protect itself against growing competition from other carmakers as they try to muscle in on the sector.
While the company acknowledged its average selling prices had ‘generally been on a downward trajectory for many years’, it highlighted that boosting affordability was ‘necessary’ and that despite the reductions its profit margins had grown over time. Shares in the firm were down slightly in after-hours trading on Wall Street.
The results came after Tesla unveiled plans for a multi-billion pound expansion of its Nevada gigafactory as it pushes ahead with plans to mass produce a new battery and its long-awaited electric semi-truck.
The carmaker will inject over £2.9billion into the site to construct two new factories, one to build the truck and another its 4680 battery.
The 4680 is a key component for Tesla to meet its target of halving battery costs and increasing production of the power cells 100-fold by the end of the decade.
Meanwhile, Tesla’s results will provide some comfort for its boss Elon Musk, the world’s second-richest man, who is currently locked in a court battle amid claims he defrauded investors after tweeting in August 2018 that he had ‘funding secured’ to take Tesla private.
The tweet sent the share price of the company shooting up, but it later fell back when it became clear a deal had not been agreed upon.
On Tuesday, Musk told a jury in San Francisco he had ‘no ill motive’ and that he could have drawn funding from several private investors to finance a buyout.
But he admitted he did not have binding agreements from investors to provide the necessary cash.
Meanwhile, Musk is spearheading an effort to boost the fortunes of Twitter, the social media website he bought for £36billion last year after a protracted legal battle sparked when he tried to back out of the acquisition.
The firm is suffering from a drop in advertising spending as the global economy slows, while Twitter has also found itself on the receiving end of a lawsuit by the Crown Estate over unpaid rent for its London HQ.