Electric-vehicle maker reported record earnings but hasn’t been immune to supply-chain problems
Elon Musk said Tesla Inc. won’t introduce new models this year, as the electric-car maker bets on increasing deliveries over diversifying its product offerings in the face of ongoing supply-chain disruptions.
Churning out new vehicles, such as the long-awaited “Cybertruck” pickup, would dent Tesla’s growth, Mr. Musk said Wednesday, as the company reported record earnings.
“The fundamental focus of Tesla this year is scaling output,” Mr. Musk said, noting that he expects the company to comfortably boost deliveries by more than 50% this year.
It has been nearly two years since Tesla last put a new model — the Model Y compact sport-utility vehicle — into customers’ hands. Buyers now have a widening array of battery-powered alternatives to choose from. Auto makers are expected to launch more than two dozen new battery-powered vehicles in the U.S. this year, according to Bank of America.
Tesla’s focus on growth helped it to generate a record profit of $5.5 billion last year on $53.8 billion of revenue.
That is up from $721 million in profit and $31.5 billion in sales in 2020, when Tesla achieved its first full-year profit, and ahead of Wall Street’s expectations.
Mr. Musk’s electric-vehicle maker leveraged in-house software engineering expertise to navigate the global computer-chip shortage last year, helping it to increase vehicle deliveries 87% over 2020, its fastest pace of annual growth in years. Tesla also benefited, like many auto makers, from surging car prices as demand outran supply.
Yet Tesla hasn’t been immune to supply-chain problems, which, paired with transportation, labor and other challenges, caused it to run factories below capacity, the company said. Semiconductors continue to be in short supply, though the crisis isn’t as severe as it was last year, Mr. Musk said, adding that he expects the situation to improve in 2023.
The company’s automotive gross margin, a measure of its cost efficiency, rose to 29.3% last year, from 25.6% in 2020, even though Tesla said rising raw-materials prices and higher logistics costs dented profit, as did increased costs related to vehicle recalls.
The company’s shares closed up around 2% Wednesday in regular trading and were fluctuating between losses and gains in post-market trading after Tesla released its results.
Besides the “Cybertruck,” unveiled in 2019, new vehicles now on the back burner include the semitrailer truck, which Tesla revealed in 2017. Tesla likely would be ready to produce those vehicles in 2023, Mr. Musk said. The company isn’t currently working on the $25,000 car that he previously teased, he said. That vehicle had been aimed at making electric vehicles more accessible to a wider array of customers.
“If the cost of our cars did not change at all, we would still sell as many as we could possibly make,” Mr. Musk said.
Analysts expect Tesla to build on last year’s momentum by delivering nearly 1.5 million vehicles to customers in 2022, according to FactSet. That is consistent with the company’s target of increasing deliveries by 50% annually, on average, in the coming years. Tesla said that, as of the fourth quarter, it was producing at an annualized rate of more than 1.22 million vehicles.
Key to those growth plans are new factories in Germany and in Texas. The company has faced delays at both facilities, which it had hoped to have operational last year. Analysts now expect Tesla, which said it had started building Model Ys in Texas, to begin delivering vehicles made at the plants in the next few months.
In Germany, the Brandenburg state government says the approval process for Tesla’s factory near Berlin is in the final stages after the company, in December, provided the last batch of requested documents.
Tesla has received temporary approval at each step of the construction process and has been producing vehicles in small numbers to test machines at the plant, but it isn’t allowed to sell any vehicles made there or shift into mass production, state officials said.
Mr. Musk said Tesla would scout new factory locations this year and likely be in a position to announce selections toward the end of the year. The company is also looking to expand capacity at its Fremont, Calif., plant.
Tesla, which has long relied on battery cells from suppliers such as Panasonic Corp., has also been working to produce new, larger cells that it designed in-house.
Meanwhile, the company has been broadening access to an advanced driver-assistance feature designed to help vehicles navigate cities. Tesla said nearly 60,000 vehicles in the U.S. now have access to the city-driving tool, which is part of a package that Tesla has dubbed “Full Self-Driving,” though it doesn’t make vehicles autonomous. Tesla recently increased the price of that package 20%, to $12,000.