

Investor's Corner
Tesla (TSLA) Q1 2022 earnings results: Another beat with 19% operating profit and margin
Tesla’s (NASDAQ:TSLA) first-quarter 2022 earnings saw the company post a challenging yet impressive quarter. The results, which were discussed in the Q1 2022 Update Letter, were released after the closing bell on Wednesday, April 20, 2022.
Tesla was impressive in the first quarter, with the company producing a total of 305,407 vehicles and delivering 310,048. The lion’s share of these numbers remains the Model 3 and Model Y, though Model S and Model Y output has improved over previous quarters.
The following is a quick overview of Tesla’s Q1 2022 results.
Revenue
Tesla posted total revenues of $18.756 billion with a gross profit of $5.460 billion. In comparison, analysts expected Tesla to post a revenue of $17.8 billion. Tesla cited a growth in vehicle deliveries, increasing average selling price, and growth in other parts of its business as a source of its revenue growth.
Earnings Per Share
Tesla posted non-GAAP earnings per share of $3.22 per share. This is notably higher than the Street’s estimates, which expected that the electric vehicle maker would be posting an EPS of $2.27 per share.
Profitability
Tesla posted $3.6B GAAP operating income and an impressive 19.2% operating margin in the first quarter, as well as GAAP net income of $3.3B and non-GAAP net income (ex-SBC1 ) of $3.7B in Q1 2022. Overall, the company posted GAAP Automotive gross margin of 32.9% in the first quarter.
Cash
Tesla noted that its quarter-end cash, cash equivalents and short-term marketable securities increased sequentially by $0.3 billion to $18.0 billion in the first quarter. The company added that its total debt excluding vehicle and energy product financing fell to less than $0.1B at the end of Q1 2022.
Vehicle Factories
Tesla noted that the first quarter saw several challenges from the global supply chain, transportation, labor, and manufacturing. These challenges ultimately limited the company’s ability to run its factories at full capacity. This was most evident in Giga Shanghai, which was hit by China’s Covid lockdowns. Fortunately, Tesla’s Giga Berlin-Brandenburg and Giga Texas are ramping together with the Fremont Factory.
Battery Technology
Tesla noted that diversification is the name of the game with battery and powertrain tech, as evidenced by the company’s decision to use cobalt-free LFP batteries for its standard range vehicle line.
“Diversification of battery chemistries is critical for long-term capacity growth, to better optimize our products for their various use cases and expand our supplier base. This is why nearly half of Tesla vehicles produced in Q1 were equipped with a lithium iron phosphate (LFP) battery, containing no nickel or cobalt. Currently, LFP batteries are used in most of our standard range vehicle products, as well as commercial energy storage applications. As a result of our energy efficient motors, a Model 3 with an LFP battery pack can still achieve a 267-mile EPA range,” Tesla wrote.
Tesla Energy
Tesla Energy actually showed quite a lot of growth in the first quarter, with deployments increasing by 90% year-over-year to 846 MWh. This was driven by strong Powerwall deployments. Solar deployments, however, decreased by 48% in Q1 to 48 MW, due to import delays on certain solar components.
Following is Tesla’s Q1 2022 Update Letter:
TSLA-Q1-2022-Update by Simon Alvarez on Scribd
Disclaimer: I am long TSLA.
Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.
Investor's Corner
xAI targets $5 billion debt offering to fuel company goals
Elon Musk’s xAI is targeting a $5B debt raise, led by Morgan Stanley, to scale its artificial intelligence efforts.

xAI’s $5 billion debt offering, marketed by Morgan Stanley, underscores Elon Musk’s ambitious plans to expand the artificial intelligence venture. The xAI package comprises bonds and two loans, highlighting the company’s strategic push to fuel its artificial intelligence development.
Last week, Morgan Stanley began pitching a floating-rate term loan B at 97 cents on the dollar with a variable interest rate of 700 basis points over the SOFR benchmark, one source said. A second option offers a fixed-rate loan and bonds at 12%, with terms contingent on investor appetite. This “best efforts” transaction, where the debt size hinges on demand, reflects cautious lending in an uncertain economic climate.
According to Reuters sources, Morgan Stanley will not guarantee the issue volume or commit its own capital in the xAI deal, marking a shift from past commitments. The change in approach stems from lessons learned during Musk’s 2022 X acquisition when Morgan Stanley and six other banks held $13 billion in debt for over two years.
Morgan Stanley and the six other banks backing Musk’s X acquisition could only dispose of that debt earlier this year. They capitalized on X’s improved operating performance over the previous two quarters as traffic on the platform increased engagement around the U.S. presidential elections. This time, Morgan Stanley’s prudent strategy mitigates similar risks.
Beyond debt, xAI is in talks to raise $20 billion in equity, potentially valuing the company between $120 billion and $200 billion, sources said. In April, Musk hinted at a significant valuation adjustment for xAI, stating he was looking to put a “proper value” on xAI during an investor call.
As xAI pursues this $5 billion debt offering, its financial strategy positions it to lead the AI revolution, blending innovation with market opportunity.
Elon Musk
Tesla tops Cathie Wood’s stock picks, predicts $2,600 surge
Tesla’s future lies beyond cars—with robotaxis, humanoid bots & AI-driven factories. Cathie Wood predicts a 9x surge in 5 years.

Cathie Wood shared that Tesla is her top stock pick. During Steven Bartlett’s podcast “The Diary Of A CEO,” the Ark Invest founder highlighted Tesla’s innovative edge, citing its convergence of robotics, energy storage, and AI.
“Because think about it. It is a convergence among three of our major platforms. So, robots, energy storage, AI,” Wood said of Tesla. She emphasized the company’s potential beyond its current offerings, particularly with its Optimus robots.
“And it’s not stopping with robotaxis; there’s a story beyond that with humanoid robots, and our $2,600 number has nothing for humanoid robots. We just thought it’d be an investment, period,” she added.
In June 2024, Ark Invest issued a $2,600 price target for Tesla, which Wood reaffirmed in a March Bloomberg interview, projecting the stock to reach this level within five years. She told Bartlett that Tesla’s Optimus robots would drive productivity gains and create new revenue streams.
Elon Musk echoed Wood’s optimism in a CNBC interview last month.
“We expect to have thousands of Optimus robots working in Tesla factories by the end of this year, beginning this fall. And we expect to scale Optimus up faster than any product, I think, in history to get to millions of units per year as soon as possible,” Musk said.
Tesla’s stock has faced volatility lately, hitting a peak closing price of $479 in December after President Donald Trump’s election win. However, Musk’s involvement with the White House DOGE office triggered protests and boycotts, contributing to a stock decline of over 40% from mid-December highs by March.
The volatility in Tesla stock alarmed investors, who urged Musk to refocus on the company. In a May earnings call, Musk responded, stating he would be “scaling down his involvement with DOGE to focus on Tesla.” Through it all, Cathie Wood and Ark Invest maintained their faith in Tesla. Wood, in particular, predicted that the “brand damage” Tesla experienced earlier this year would not be long term.
Despite recent fluctuations, Wood’s confidence in Tesla underscores its potential to redefine industries through AI and robotics. As Musk shifts his focus back to Tesla, the company’s advancements in Optimus and other innovations could drive it toward Wood’s ambitious $2,600 target, positioning Tesla as a leader in the evolving tech landscape.
Investor's Corner
Goldman Sachs reduces Tesla price target to $285
Despite Goldman Sach’s NASDAQ: TSLA price cut to $285, Tesla boasts $95.7B in revenue & nearly $1T market cap.

Goldman Sachs analysts cut Tesla’s price target to $285 from $295, maintaining a Neutral rating.
The adjustment reflects weaker sales performance across key markets, with Tesla shares trading at $284.70, down nearly 18% in the past week. The analysts pointed to declining sales data in the United States, Europe, and China as the primary driver for the revised outlook. In the U.S., Tesla’s quarter-to-date deliveries through May fell mid-teens year-over-year, according to Wards and Motor Intelligence.
In Europe, April registrations plummeted 50% year-over-year, with May showing a mid-20% decline, per industry data. Meanwhile, the China Passenger Car Association (CPCA) reported a 20% year-over-year drop in May, despite a 5.5% sequential increase from April. Consumer surveys from HundredX and Morning Consult also shaped Goldman Sachs’ lowered delivery and EPS forecasts.
Goldman Sachs now projects Tesla’s second-quarter deliveries to range between 335,000 and 395,000 vehicles, with a base case of 365,000, down from a prior estimate of 410,000 and below the Visible Alpha Consensus of 417,000. Despite these headwinds, Tesla’s financials remain strong, with $95.7 billion in trailing twelve-month revenue and a $917 billion market capitalization.
Regionally, Tesla’s challenges are stark. In Germany, the German road traffic agency KBA reported Tesla’s May sales dropped 36.2% year-over-year, despite a 44.9% surge in overall electric vehicle registrations. Tesla’s sales fell 29% last month in Spain, according to the ANFAC industry group. These declines highlight shifting consumer preferences amid growing competition.
On a positive note, Tesla is making strategic moves. The Model 3 and Model Y are part of a Chinese government campaign to boost rural sales, potentially mitigating losses. Piper Sandler analysts reiterated an Overweight rating, emphasizing Tesla’s supply chain strategy.
Alexander Potter stated, “Thanks to vertical integration, Tesla is the only car company that is trying to source batteries, at scale, without relying on China.”
As Tesla navigates these delivery challenges, its focus on innovation and supply chain resilience could help it maintain its edge in the electric vehicle market despite short-term hurdles.
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