Tesla Inc posted a quarterly profit that beat analysts' expectations as a series of price hikes for Tesla electric cars helped offset production challenges caused by the COVID-related shutdowns in China.
According to Arab Net, the company's chief financial officer, Zachary Kirkorn, said that Tesla is still seeking to reach 50% growth in deliveries this year, adding that while the goal has become more difficult, it is still possible with strong implementation.
In turn, the company's CEO, Elon Musk, expected that inflation will begin to decline by the end of 2022, and that the prices of most basic commodities will stabilize.
Musk said in a conference call that Tesla has no problem with demand, but it is having a problem with production.
Musk rejected the idea that global economic problems were hurting consumer interest in Tesla products, despite the rise in car prices to what he called critical levels, according to Reuters quoted and seen by Al Arabiya.net.
This comes as the price of the Tesla Model (Y) in the United States has risen to $65,990, more than 30% since the beginning of 2021.
Tesla shares are also up about 1% in after-hours trading, but are down about 40% from their peak in November.
The Tesla plant in China ended the second quarter with a record monthly production level.
Musk said the new factories in Berlin and Texas aim to produce 5,000 cars per week by the end of the year, noting that the Berlin plant produced 1,000 cars per week in June.
Morgan Stanley analysts commented, in a report after Tesla's earnings announcement, that they see headwinds in the near term due to (new) challenges as new production ramps up, particularly in Berlin.
Tesla executives acknowledged some continuing tightness in supply of older generation microchips, but said there were no major issues with chip and battery supply that prevented unexpected shutdowns linked to Covid.
The electric vehicle maker reported adjusted earnings of $2.27 per share for the second quarter, versus analyst estimates of $1.81, down from $3.22 in the previous quarter.
Automotive gross profit margin decreased to 27.9%, down from the previous year and the previous quarter, amid inflationary pressures.
Tesla's total revenue fell to $16.93 billion in the second quarter from $18.76 billion in the previous quarter, ending its streak of record revenue in recent quarters.
Analysts had expected revenue of $17.10 billion, according to IBES data from Refinitiv.
