Elon Musk is used to making spectacular statements.
The never stingy serial entrepreneur with promises to keep the flame alive around premium electric vehicle maker Tesla (TSLA) . He stayed true to this tradition during the company’s third-quarter earnings call.
Indeed, the executive has announced that Tesla will have an “epic” year-end despite its somewhat disappointing third-quarter results.
“We’re expecting a record in Q4,” Musk told analysts in his opening remarks. “Looks like we’re going to have an epic year-end.”
“Q4 is looking incredibly good,” he added.
‘Great demand’
“I can’t emphasize enough [that] We have great demand for Q4. We hope to sell all the cars we make in the furthest possible future. So the factories are running at full speed and we are delivering every vehicle we make and maintaining strong operating margins. “
Tesla posted a third-quarter net profit of $3.3 billion on turnover out of 21.45 billion dollars, the company speak on October 19. Although revenue increased 56%, it was less than the $21.96 billion expected by analysts.
Musk’s upbeat tone, however, is out of step with CFO Zach Kirkhorn’s caution.
Kirkhorn asserts that Tesla is having a hard time getting cars into the hands of customers. And these are problems that the team didn’t anticipate. The company saw an increase in the number of cars shipped at the end of the quarter, which it said “had a negative impact on working capital.
“This issue has particular precedent for ships from Shanghai to Europe and for local trucking in certain areas of the US and Europe. Our historical operating pattern of That building by region results in a huge concentration of outbound logistics demand in the final weeks of each quarter,” said Kirkhorn.
Be careful with the targets
He continued:
“Just to speak of this, about two-thirds of our Q3 deliveries occurred in September and one-third of the last two weeks. As a result, we’ve started to smooth the execution of our deliveries. construction activity in the region during the quarter to reduce peak demand for logistics outbound shipments We expect this to simplify our operations, reduce costs and improve the customer experience .”
“As we look ahead, our plans suggest that we are on track for 50% year-on-year production growth this year. Although we are on track. supply chain risks beyond our control. In terms of delivery, we expect growth of just under 50% due to the increase in vehicle transit at the end of the year as outlined above. This means again, you should expect a gap between production and delivery in Q4. And these cars in transit will be delivered immediately to their customers when they arrive at their destination and Q1 [of 2023]. ”
If we stick to Kirkhorn’s claims, Tesla will produce nearly 1.4 million vehicles by 2022 and deliver more than 1.4 million.
That would be a record in either case, but the company had hoped to deliver 1.5 million vehicles by 2022.
In the third quarter, Tesla produced 365,923 vehicles, up 54% year-over-year. Model Y and Model 3 accounted for 94.6% of total production. Over the three quarters, the company has produced almost the same number of vehicles produced in 2021 – 929,910 currently compared to 930,422 in 2021.
In terms of deliveries, the company delivered 908,573 units in the three quarters of 2022, including 343,830 vehicles in the third quarter.
