TSLA Q3 2022 Earnings

Call Details

• Call Title: Tesla, Inc. Q3 2022 Earnings Call
• Date: October 19, 2022 at 8:30 PM UTC
• Management Team:
  • Elon Musk (Chief Executive Officer)
  • Zachary Kirkhorn (Chief Financial Officer)
  • Martin Viecha (VP of Investor Relations)
  • Drew Baglino (SVP of Powertrain and Energy Engineering)

Call Summary

Financial Performance

• GAAP operating margin was reported at 17.2% and automotive gross margin was 27.9% for Q3 2022.
• Free cash flow in Q3 exceeded $3 billion and free cash flow approached $9 billion over the trailing 12 months.
• Energy business achieved its strongest gross profit to date driven by record Megapack and firewall deployments.
• Raw materials, logistics, and foreign exchange were cited as material margin headwinds during the quarter.
• Cars in transit at quarter end increased working capital needs and negatively impacted reported free cash flow timing.
• Removing regulatory credits and the impact of Austin and Berlin ramps would have resulted in automotive gross margin near 30%.

Guidance

• Company reaffirmed plans to grow production roughly 50% year-over-year and said production is on track for that target this year.
• Deliveries are expected to be just under 50% growth due to elevated cars in transit at year end.
• Wide release of Full Self-Driving (FSD) beta in North America was targeted to customers who ordered FSD 'this year' and described as likely about a month from the call.
• Austin and Berlin ramp costs will continue to weigh on near-term margins but are expected to be less impactful in upcoming quarters than Q3.
• 4680 cell output is growing rapidly and was described as tripling quarter-over-quarter with plans to incorporate 4680s into a significant portion of Texas production in the coming months.
• Semi production first customer deliveries were scheduled for December 1, 2022, with a tentative 2024 target of 50,000 units in North America.