TSLA Q1 2022 Earnings

Call Details

• Call Title: Tesla, Inc. Q1 2022 Earnings Call
• Date: April 20, 2022 at 9:30 PM UTC
• Management Team:
  • Martin Viecha (VP of Investor Relations)
  • Elon Musk (CEO)
  • Zachary Kirkhorn (CFO)
  • Drew Baglino (SVP of Powertrain and Energy Engineering)
  • Lars Moravy (SVP of Vehicle Engineering)

Call Summary

Financial Performance

• Q1 delivered the company's highest vehicle deliveries on record.
• GAAP automotive gross margin reached 32.9% in Q1.
• The company achieved a record operating margin of over 19% in Q1.
• Tesla recognized a one-time benefit of $288M from credit revenue related to a U.S. CAFE penalty change in Q1.
• Free cash flow remained strong in Q1 but was negatively impacted by working capital associated with lower-than-planned production.
• Tesla reduced debt excluding product financing to nearly zero as of the quarter end.

Guidance

• Tesla lost about a month of build volume at Gigafactory Shanghai due to COVID shutdowns, which will negatively impact Q2 production volume.
• Q2 vehicle production is expected to be roughly on par with Q1, with the possibility of being slightly lower or slightly higher depending on recovery speed in Shanghai.
• Zachary Kirkhorn reiterated that a 50% or above vehicle production growth rate for 2022 remains achievable for the year.
• Elon Musk stated there is a reasonable shot at ~60% production increase versus 2021.
• Austin and Berlin are in early ramps and these commissioning inefficiencies are expected to flow through gross margins in Q2.
• Tesla expects 4680 volume production possibly toward the end of Q3 and certainly in Q4, and does not view 4680 output as a risk to achieving ~1.5 million vehicles in 2022.
• Tesla is targeting volume production of a robotaxi-optimized vehicle in 2024.