

Investor's Corner
Tesla (TSLA) Q2 2022 earnings results: Analysts’ revenue estimates met, EPS expectations exceeded
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.
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.
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.
Elon Musk
Tesla blacklisted by Swedish pension fund AP7 as it sells entire stake
A Swedish pension fund is offloading its Tesla holdings for good.

Tesla shares have been blacklisted by the Swedish pension fund AP7, who said earlier today that it has “verified violations of labor rights in the United States” by the automaker.
The fund ended up selling its entire stake, which was worth around $1.36 billion when it liquidated its holdings in late May. Reuters first reported on AP7’s move.
Other pension and retirement funds have relinquished some of their Tesla holdings due to CEO Elon Musk’s involvement in politics, among other reasons, and although the company’s stock has been a great contributor to growth for many funds over the past decade, these managers are not willing to see past the CEO’s right to free speech.
However, AP7 says the move is related not to Musk’s involvement in government nor his political stances. Instead, the fund said it verified several labor rights violations in the U.S.:
“AP7 has decided to blacklist Tesla due to verified violations of labor rights in the United States. Despite several years of dialogue with Tesla, including shareholder proposals in collaboration with other investors, the company has not taken sufficient measures to address the issues.”
Tesla made up about 1 percent of the AP7 Equity Fund, according to a spokesperson. This equated to roughly 13 billion crowns, but the fund’s total assets were about 1,181 billion crowns at the end of May when the Tesla stake was sold off.
Tesla has had its share of labor lawsuits over the past few years, just as any large company deals with at some point or another. There have been claims of restrictions against labor union supporters, including one that Tesla was favored by judges, as they did not want pro-union clothing in the factory. Tesla argued that loose-fitting clothing presented a safety hazard, and the courts agreed.

(Photo: Tesla)
There have also been claims of racism at the Fremont Factory by a former elevator contractor named Owen Diaz. He was awarded a substantial sum of $137m. However, U.S. District Judge William Orrick ruled the $137 million award was excessive, reducing it to $15 million. Diaz rejected this sum.
Another jury awarded Diaz $3.2 million. Diaz’s legal team said this payout was inadequate. He and Tesla ultimately settled for an undisclosed amount.
AP7 did not list any of the current labor violations that it cited as its reason for
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.
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