Tesla Inc.

TSLA -4.96%

reported record quarterly earnings as consumers purchased the company’s electric vehicles, although disruptions in production in China and inflationary pressures signal that there will be a more bumpy road ahead.

The automaker said first-quarter sales jumped about 80% to $ 18.76 billion, bringing in $ 3.32 billion in revenue. According to analysts polled by FactSet, Wall Street expected first-quarter revenue to be about $ 2.2 billion with sales of about $ 17.7 billion.

The world’s largest car company is recovering after shutting down its factory in Shanghai, where work was suspended on March 28 due to government austerity measures aimed at slowing the spread of Covid-19.

According to Credit Suisse, the close, which disrupted output in the first quarter, is likely to bring greater losses in the second quarter, cutting the company’s production by about 90,000 cars. This estimate suggests that the plant, which has become Tesla’s largest in terms of production, will operate at a reduced level in the coming weeks.

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Tesla, which produced about 930,000 cars last year, aims to increase production by an average of 50% annually. However, the company said its plants are likely to continue to operate below capacity until 2022, largely due to bottlenecks in the supply chain.

Tesla delivered about 310,000 vehicles worldwide in the first quarter, up from 184,877 a year earlier and 308,650 in the fourth quarter. CEO Elon Musk tweeted earlier this month that supply chain disruptions and China’s action on COVID-19 made the period extremely difficult.

Tesla shares closed nearly 5% on Wednesday before rising about 3.6% in late trading after the company released its quarterly results.

Mr Musk, who last week made optional applications to take over Twitter for $ 43 billion, said on Wednesday that he planned to engage in talks with Tesla analysts about profits. The event falls on a date that is a kind of holiday for the head of the billionaire, who is known for his jokes – “420” – is a euphemism for marijuana.

As of Tuesday, car assembly at the Tesla plant in Shanghai has partially resumed, according to Shanghai Television, which is run by the local government.

“We will increase production in the next three to four days to resume production in one shift,” said Son Gan, senior production director at Shanghai’s Tesla plant.

Tesla had about a week’s supply of car parts at the plant and worked with local authorities and suppliers to solve logistics problems, the broadcaster said. Analysts note that manufacturers from Shanghai had problems with the delivery of parts because restrictions on travel by China made it difficult for trucks to enter the region.

Tesla has raised prices for its cars, probably helping to offset the cost of increased production at new plants such as Giga Texas, near Austin, according to Bernstein Research.


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Sergio Flores for The Wall Street Journal

Meanwhile, customers have to wait longer to get behind the wheel of the new Tesla. According to Bernstein Research, in March, American buyers can expect about eight months of a new compact sports SUV Model Y, one of the company’s most popular products. Delivery times have historically ranged from two to eight weeks domestically, the firm said.

Tesla is taking more of its cars amid inflation and constant bottlenecks in supply chains.

“Inflationary impact on our cost structure has helped adjust prices for our products, despite the constant focus on reducing our production costs where possible,” the company said Wednesday.

In recent weeks, Tesla has delivered its first model Y, manufactured at these new plants. Mr Musk said localization of production would improve Tesla’s economy in the long run.

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The company, like many others in the industry, is also struggling with rising costs for materials used in rechargeable batteries that power electric vehicles. Raw materials account for 80% of the cost of a lithium-ion battery compared to 40% in 2015, according to Benchmark Mineral Intelligence, which tracks the battery supply chain.

Earlier this month, Mr Musk tweeted that lithium prices had “gone to insane levels”, reconsidering the idea that Tesla could engage in metal mining and recycling.

Tesla has been flirting with this prospect for years and has even come close to a deal in the middle of the last decade to buy lithium mines in the US and Argentina, according to a person familiar with the issue. But the company did not fulfill these acquisitions because it gave priority to the production of its Model 3 sedan, the man said. In recent years, the balance of power has shifted towards suppliers such as car companies with Ford Motor The company

and Volkswagen AG

a novice Rivian Automotive Inc. seek to obtain the materials needed to achieve the ambitious goals of electric vehicle production. Ford and General Motors The company

is scheduled to report earnings next week. Rivian quarterly results will be released in May.

Lithium carbonate prices averaged about $ 60,800 a tonne in March, about $ 50,000 more than a year earlier, according to Benchmark.

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Write Rebecca Elliott at rebecca.elliott@wsj.com

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