Fri, 01 Dec 2023

Tesla's profit surges 12 pc in fourth quarter

ANI
26 Jan 2023, 16:27 GMT+10

Austin (Texas) [US], January 26 (ANI) Tesla reported a respectable jump in profit for the last quarter of 2022, but slipping profit margins and slowing sales growth underlined the challenges that have weighed on the carmaker's stock, according to the New York Times.

The profit increase of 12 per cent capped a tumultuous year that included intensifying competition, supply chain disruptions and concerns about the behaviour of its chief executive, Elon Musk. There is no sign from Tesla's report to shareholders on Wednesday that those problems are going away, NYT reported.

The year was dominated by Musk's acquisition of Twitter, which led to complaints by Tesla investors that he was neglecting his duties at the carmaker at a critical time, the daily newspaper said. Tesla shares fell 65 per cent during 2022 as investors doubted whether the company was reacting energetically enough to a long list of challenges and risks.

Among other things, the New York Times said investors worried that Musk would sell more of his stake in Tesla to finance his Twitter acquisition, flooding the market. They worried about Tesla's prospects in China, the world's largest car market, because of problems maintaining the supply of critical parts and growing competition from rivals like the Chinese manufacturer BYD, the New York Times said. During 2022, BYD surpassed Tesla in total electric cars sold in China, it said.

At the same time, slowing economic growth and rising interest rates in the US threatened to reduce the number of people who can afford a Tesla, NYT said. Fourth-quarter deliveries rose 18 per cent, to 405,000 vehicles, the company said on January 2, a lot less than Wall Street analysts had expected and short of Tesla's own targets.

"It was our best year ever on every level," Musk said during a conference call with investors on Wednesday, according to NYT. But he acknowledged that "2022 was an incredibly challenging year."NYT said Musk also addressed criticism that his statements on Twitter had alienated some potential buyers. His 127 million followers on the platform, he said, "suggests I'm reasonably popular."While acknowledging that he might have offended some people, he maintained that his presence on the platform helps Tesla. "Twitter is actually an incredible tool for driving demand," he said.

NYT said Tesla shares recouped some of their losses in January after the company slashed prices on most of its electric cars in the US and Europe to revive sales. The price of a Model 3 sedan, the least expensive Tesla, dropped by USD 3,000, selling now for USD 44,000 in the US before government incentives.

Although the price cuts helped to promote sales, they also took a toll on Tesla's profit margin. The daily newspaper said its gross profit margin on car sales slipped to 26 per cent in the fourth quarter from 28 per cent in the third quarter of 2022 and 31 per cent in the fourth quarter of 2021.

Net profit for the quarter was USD 3.7 billion, up from USD 3.3 billion in the third quarter, Tesla said. For the full year, NYT reported Tesla's profit more than doubled to USD 12.6 billion from USD 5.5 billion in 2021. Sales for the year, including revenue from solar panels, energy storage and other businesses, rose to USD 81.5 billion from USD 53.8 billion the previous year, according to the carmaker. (ANI)

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