Tesla Model S

Amid a generally tough quarter for auto companies worldwide, supply chain disruptions, rising, inflation, and an economic downturn in the market, Tesla seems to have fared well enough. While its revenue was just short of analyst estimates, the EV maker managed to exceed expectations on earnings for the third quarter of the year.

As per the earnings for the quarter, reported by Tesla after the bell, the leading automobile manufacturer managed to nab $21.45 billion in revenue for the quarter, falling short of the estimated $21.96 billion but managing a year-over-year (YoY) growth of 5%. It did manage to beat estimates when it comes to its adjusted EPS (earnings per share) – the same beat the estimated 99 cents/share to amount to $1.05 per share, which is an annual growth of 69.4%.

Its free cash flow for the period amounted to $3.3 billion, while it clocked $3.688 billion in operating income (YoY growth of 84%). Its net income (GAAP) for the quarter rose by 103% YoY to reach $3.29 billion, while automotive revenues and automotive gross profit clocked annual growth of 55% and 42% to reach $18.6 billion and $5.2 billion respectively.

“I can’t emphasize enough we have excellent demand for Q4 and we expect to sell every car that we make for as far into the future as we can see,” Elon Musk said on an earnings call. “The factories are running at full speed and we’re delivering every car we make, and keeping operating margins strong.”

“Historically, our delivery volumes have skewed towards the end of each quarter due to regional batch building of cars. As our production volumes continue to grow, it is becoming increasingly challenging to secure vehicle transportation capacity and at a reasonable cost during these peak logistics weeks. In Q3, we began transitioning to a more even regional mix of vehicle builds each week, which led to an increase in cars in transit at the end of the quarter. These cars have been ordered and will be delivered to customers upon arrival at their destination,” Teska said in a press release.

Speaking of automobiles, the deliveries of vehicles assisted in the growth of revenue for the third quarter. During the period, the EV giant clocked strong growth in deliveries and productions alike – it produced 19, 935 units of Model S and Model X vehicles during the quarter (annual growth of 123%), while the production of Model 3 and Model Y vehicles saw a growth of 51% during the quarter to reach 345,988.

A total of 365, 923 vehicles, thus, were produced during the quarter – a YoY growth of 54%.

Deliveries saw strong growth as well – Tesla delivered 18,627 Model S and Model X vehicles in Q3 2022, an annual growth of 101%, while the deliveries of Model 3 and Model Y vehicles saw a growth of 40% YoY to reach 325, 158. Overall, deliveries in the third quarter grew by 42% to reach 343, 830.

Going forward, Tesla intends to double down on its manufacturing capacity and clock a YoY growth of 50% in vehicle deliveries “over a multi-year horizon.” It also intends to increase its weekly build rate in its Fremont and Shanghai facilities.