Tesla Q2 earnings call - lower sales but healthy margins, Bitcoin sold

21 July 2022

The financial report for Q2 is out and Tesla saw a decline in profits and sales. Yet it is also reflecting the fact that Tesla is maturing as a business and that’s a good thing. Let’s have a closer look at the numbers.

First is the number everyone is always looking at - the profit. Tesla reported $2.3 billion in profit which was a bit higher than experts predicted, yes - it was lower than $3.3 billion it generated in Q1 but still was double of its profit same time last year. It was Tesla’s third best quarter profit in its history.

Tesla’s automotive revenue dropped down to $14.6 billion from $16.8 billion last quarter but the profit margin remained at 27.9% which is by far the best in the industry. Interesting bit is Tesla’s income from regulatory credits - these are the CO2 credits that the company sells to other automakers. The revenue from credits dropped to $344 million compared to $644 million in the previous quarter. The CO2 credits revenue will keep on going down since other manufacturers are joining the EV race and no longer need them from Tesla.

Tesla is no longer just an automotive company and looking into its financial reports show the direction the company is taking. The total revenue for Q2 was $16.9 billion and total profit margin was 25% which is the lowest in the last 12 months. But the operating margin after expenses remained at 14.6% which is very healthy.

Company isn’t immune to supply chain delays and it suffered from Shanghai factory closures and from teething problems at Giga Berlin. Total production was 258,580 vehicles which is a 25% increase year-on-year. Deliveries stood at 254,695 which was significantly lower than last quarter but still represented 25% growth compared to the same time last year. Tesla’s total capacity for vehicle manufacturing is 1.9 million vehicles a year once all the factories are at full speed.

Let’s not forget that Tesla is also an energy company and solar panel manufacturer. It had deployed 106 MW of solar in the last 3 months which is more than double that of previous quarter. It deployed 1,133 MWh of battery storage and it installed 3,971 new Supercharger stations.

Tesla is fully funded and it sits on $18.9 billion thanks to $621 million of free cash flow and the sale of 75% of its Bitcoin holdings which netted the company $936 million.

Overall Tesla’s business is looking good, it is healthy and strong. Tesla’s total debt is down to $66 million (excluding vehicle and energy financing) from $3.99 billion 12 months ago. The total liabilities sit at $30.8 billion with assets of $68.5 billion.

The link below will take you to the Q2 financial statements with all the details.

Source