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Investor's Corner

Tesla (TSLA) Q2 2022 earnings results: Analysts’ revenue estimates met, EPS expectations exceeded

A Tesla retail store at International Market Place in Waikiki, Honolulu, Oahu, Hawaii. Here, a Tesla Model X is on display with its falcon wing doors up. (Credit: Tony Webster from Minneapolis, Minnesota, United States, CC BY 2.0 , via Wikimedia Commons)

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Tesla (NASDAQ:TSLA) posted its second-quarter 2022 earnings report after markets closed today. The results, which were discussed in the Q2 2022 Update Letter, were released after the closing bell on Wednesday, July 20, 2022.

Tesla faced headwinds in the second quarter, with the company producing a total of 258,580 vehicles and delivering 254,695. Tesla’s figures could be attributed to Giga Shanghai’s Covid-related shutdowns in April, which cost the company several weeks’ worth of vehicle production. 

The following is a quick overview of Tesla’s Q2 2022 results.

REVENUE

Tesla posted total revenues of $16.934B billion with a gross profit of $4.234B billion. In comparison, analysts expected Tesla to post revenue of $16.9 billion. Overall, Tesla’s revenue grew 42% year-over-year.

EARNINGS PER SHARE

Tesla posted non-GAAP earnings per share of $2.27 per share. In comparison, analysts were expecting Tesla to post adjusted earnings per share of $1.83

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CASH

Tesla posted operating cash flow less CAPEX of $621 million in the second quarter. In total, the company was able to add $0.88 billion in its cash and cash equivalents to $18.3 billion in Q2 2022. Tesla noted that it converted approximately 75% of its Bitcoin purchases into fiat currency, bringing in $936M of cash to the company’s balance sheet.

PROFITABILITY

Tesla posted $2.5B GAAP operating income; 14.6% operating margin in Q2 2022, $2.3B GAAP net income; $2.6B non-GAAP net income (ex-SBC1) in the second quarter, and 27.9% GAAP automotive gross margin in Q2. Tesla’s operating income improved YoY to $2.5B in Q2, resulting in a 14.6% operating margin.

OTHER NOTABLE UPDATES

The Fremont factory was able to produce a record number of vehicles in the second quarter. The next generation of 4680 cell machinery has also been installed in Giga Texas. The new 4680 machinery are currently in the process of being commissioned

Gigafactory Shanghai currently has a capacity of over 750,000 vehicles per year, but the facility will soon be able to produce more after its upgrades this month. 

Giga Berlin exhibited strong production rate improvement at the end of the second quarter, with Tesla Germany producing more than 1,000 Model Y in one week. These vehicles are also equipped with 2170 cells, and thus still use more parts. 

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As for Full Self-Driving and Autopilot, the FSD Beta group has now increased to over 100,000 drivers. Tesla Vision is also now being used for other features such as tightening seatbelts earlier in certain crashes. 

Tesla Energy deployments decreased by 11% year-over-year in the second quarter to just 1.1 GWh, mainly due to semiconductor challenges. Solar deployments increased by 25% YoY in Q2 to 106 MW, however. 

Below is Tesla’s Q2 2022 Update Letter. 

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.

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Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Elon Musk

Tesla analyst says Musk stock buy should send this signal to investors

“With Musk’s (Tesla stock) purchase, combined with the upward momentum for delivery expectations and robotaxi rollout, we are becoming more bullish.”

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(Credit: Tesla)

Tesla CEO Elon Musk purchased roughly $1 billion in Tesla shares on Friday, and analysts are now breaking down the move as the stock is headed upward.

One of them is William Blair analyst Jed Dorsheimer, who said in a new note to investors on Monday that Musk’s move should send a signal of confidence to stock buyers, especially considering the company’s numerous catalysts that currently exist.

Elon Musk just bought $1 billion in Tesla stock, his biggest purchase ever

Dorsheimer said in the note:

“With Musk’s (Tesla stock) purchase, combined with the upward momentum for delivery expectations and robotaxi rollout, we are becoming more bullish. This purchase is Musk’s first buy since 2020. To us, this sends a strong signal of confidence in the most important part of Tesla’s future business, robotaxi.”

Musk putting an additional $1 billion back into the company in the form of more stock ownership is obviously a huge vote of confidence.

He knows more than anyone about the progress Tesla has made and is making on the Robotaxi platform, as well as the company’s ongoing efforts to solve vehicle autonomy. If he’s buying stock, it is more than likely a good sign.

Tesla has continued to expand its Robotaxi platform in a number of ways. The project has gotten bigger in terms of service area, vehicle fleet, and testing population. Tesla has also recently received a permit to test in Nevada, unlocking the potential to expand into a brand-new state for the company.

In the note, Dorsheimer also touched on Musk’s recent pay package, revealing that William Blair recently met with Tesla’s Board of Directors, who gave the firm some more color on the situation:

“We recently participated in a meeting with Tesla’s board of directors to discuss the details of Musk’s performance package. The board is confident of its position in the Delaware case and anticipates a verdict by end of year. It does not expect a similar situation to occur under new Texas jurisdiction. Musk has the board’s full support, and we expect he’ll get more than enough shareholder support for this to pass with flying colors.”

Tesla stock is up over 6 percent so far today, trading at $421.50 at the time of publication.

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Elon Musk

Elon Musk just bought $1 billion in Tesla stock, his biggest purchase ever

Prior to this latest move, Musk’s most recent purchase was for about 200,000 shares worth $10 million in 2020.

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Gage Skidmore from Surprise, AZ, United States of America, CC BY-SA 2.0 , via Wikimedia Commons


Tesla (NASDAQ:TSLA) shares rose on Monday after CEO Elon Musk disclosed a rare insider purchase of company stock worth about $1 billion. 

A filing with the U.S. Securities and Exchange Commission (SEC) revealed that Musk acquired 2.57 million shares last Friday at various prices. The move represents Musk’s largest TSLA purchase ever by value, as per Verity data.

Elon Musk’s TSLA purchase

The disclosure sent Tesla shares up more than 8% in premarket trading Monday, as investors read the purchase as a notable vote of confidence, as stated in a CNBC report. Tesla stock had closed slightly lower Friday but remains more than 25% higher over the past three months. It should be noted that prior to this latest move, Musk’s most recent purchase was for about 200,000 shares worth $10 million in 2020.

Market watchers say the purchase could help shore up investor sentiment amid a volatile year for TSLA stock. Shares have faced pressure from a variety of factors, from year-over-year sales challenges due to the new Model Y changeover, political controversies tied to Musk, and reduced U.S. incentives for EVs under the Trump administration. Nevertheless, analysts such as Wedbush’s Dan Ives stated that Musk’s purchase was a “huge sign of confidence for Tesla bulls and shows Musk is doubling down on his Tesla A.I. bet.”

Tesla and Elon Musk

Musk already owns about 13% of Tesla, and his latest purchase comes as the company prepares for a key shareholder vote in November. Investors will decide whether to approve a compensation package for Musk that could ultimately be worth as much as $975 billion if ambitious market value milestones are achieved. The package has a long-term target of pushing Tesla’s market capitalization to $8.5 trillion, compared with about $1.3 trillion at Friday’s close.

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Wall Street’s current consensus price target still implies a roughly 20% decline from current levels, though some Tesla bulls remain optimistic that the company could shift its focus toward autonomy, AI, and robotics. Musk has also asked shareholders to approve an investment into his latest venture, xAI.

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Investor's Corner

Tesla bear turns bullish for two reasons as stock continues boost

“I think from a trading perspective, it looks very interesting,” Nathan said, citing numerous signs of strength, such as holding its 200-day moving average and holding against its resistance level.

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Credit: Tesla Manufacturing

A Tesla bear is changing his tune, turning bullish for two reasons as the company’s stock has continued to get a boost over the past month.

Dan Nathan, a notorious skeptic of Tesla shares, said he is changing his tune, at least in the short term, on the company’s stock because of “technicals and sentiment,” believing the company is on track for a strong Q3, but also an investment story that will slowly veer away from its automotive business.

“I think from a trading perspective, it looks very interesting,” Nathan said, citing numerous signs of strength, such as holding its 200-day moving average and holding against its resistance level.

He also said he believes a rally for the stock could continue as it heads into the end of the quarter, especially as the $7,500 electric vehicle tax credit is coming to an end at the end of the month.

With that being said, he believes the consensus for Q3 deliveries is “probably low,” as he believes Wall Street is likely underestimating what Tesla will bring to the table on October 1 or 2 when it reports numbers for the quarter.

Tesla shares are already up over five percent today, with gains exceeding nine percent over the past five trading days, and more than fourteen percent in the past month.

While some analysts are looking at the performance of other Mag 7 stocks, movement on rates from the Federal Reserve, and other broader market factors as reasoning for Tesla’s strong performance, it appears some movement could be related to the company’s recent developments instead.

Over the past week, Tesla has made some strides in its Robotaxi program, including a new license to test the platform in the State of Nevada, which we reported on.

Tesla lands regulatory green light for Robotaxi testing in new state

Additionally, the company is riding the tails of the end of the EV tax credit, as inventory, both new and used, is running extremely low, generally speaking. Many markets do not have any vehicles to purchase as of right now, making delivery by September 30 extremely difficult.

However, there has been some adjustments to the guidelines by the IRS, which can be read here:

Tesla set to win big after IRS adjusts EV tax credit rules

Tesla is trading at around $389 at 10:56 a.m. on the East Coast.

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