

Investor's Corner
Tesla (TSLA) Q4 and FY 2021 earnings results: Revenue and EPS beat on most impressive quarter to date
Tesla’s (NASDAQ:TSLA) fourth-quarter and full-year 2021 earnings saw the company post its most impressive quarter yet. The results, which were discussed in the Q4 and FY 2021 Update Letter, were released after the closing bell on Wednesday, January 26, 2022.
Tesla was impressive in the fourth quarter, with the company producing a total of 305,840 vehicles and delivering 308,600. The lion’s share of these numbers came from the Model 3 and Model Y, as the ramp of the refreshed Model S and Model X hit challenges over the year. Tesla’s numbers were even more impressive for 2021 overall, with the company producing a total of 930,422 and delivering 936,172 vehicles, setting new records.
Tesla summarized its blockbuster year in the following section of its Q4 FY 2021 Update Letter. With its stellar results, the company notes that it is no longer a question if electric vehicles could be profitable. And now that it has another breakthrough year under its belt, Tesla has noted that it is now looking into the future.
“2021 was a breakthrough year for Tesla. There should no longer be doubt about the viability and profitability of electric vehicles. With our deliveries up 87% in 2021, we achieved the highest quarterly operating margin among all volume OEMs, based on the latest available data, demonstrating that EVs can be more profitable than combustion engine vehicles.”
“After a successful 2021, our focus shifts to the future. We aim to increase our production as quickly as we can, not only through ramping production at new factories in Austin and Berlin, but also by maximizing output from our established factories in Fremont and Shanghai. We believe competitiveness in the EV market will be determined by the ability to add capacity across the supply chain and ramp production.”
The following are the key points in Tesla’s Q4 FY 2020 Update Letter.
Earnings Per Share and Revenue
For the fourth quarter of 2021, Tesla’s earnings per share stood at $2.54 and total revenue of $17.72 billion. In comparison, Wall Street expected the EV maker to post earnings per share of $2.35 and revenues of $16.65 billion.
“Total revenue grew 65% YoY in Q4 to $17.7B. YoY, revenue was impacted by the following items: (1) growth in vehicle deliveries; (2) growth in other parts of the business,” Tesla noted.
Cash
Tesla has maintained a formidable war chest over the past quarters, and this trend has continued in the fourth quarter. Despite the ongoing buildout of Gigafactory Texas and Giga Berlin, as well as the ongoing optimizations in Gigafactory Shanghai and the Fremont Factory, Tesla has reported that it still has $17.6 billion in cash in the fourth quarter.
“Quarter-end cash and cash equivalents increased sequentially by $1.5B to $17.6B in Q4, driven mainly by free cash flow of $2.8B, partially offset by net debt and finance lease repayments of $1.5B. Our total debt excluding vehicle and energy product financing has fallen to just $1.4B at the end of 2021,” the company wrote.
Profitability
For Q4 2021, Tesla posted a GAAP operating income of $2.6 billion and a 14.7% operating margin. The company also posted a $2.3 billion GAAP net income and 30.6% GAAP automotive gross margin in the fourth quarter.
“Our operating income improved to $2.6B in Q4 compared to the same period last year, resulting in a 14.7% operating margin. This profit level was reached while incurring SBC expense attributable to the 2018 CEO award of $245M in Q4, driven by the final two operational milestones becoming probable,” Tesla wrote.
Production Run-Rate by EOY
By the end of 2021, Tesla’s annualized vehicle production run-rate was over 1.22 million. It should be noted that this was achieved with only two factories, Gigafactory Shanghai and the Fremont Factory. This number would likely see a notable improvement in 2022 when Giga Texas and Gigafactory Berlin start their operations as well.
Tesla’s Q4 and FY 2021 Update Letter could be accessed below.
Tsla q4 and Fy 2021 Update by Simon Alvarez on Scribd
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
Analyst: Elon Musk’s $1 trillion Tesla pay deal modest against robot market potential
Jonas highlighted Tesla’s longer-term ambitions in robotics as a key factor in his assessment.

Morgan Stanley analyst Adam Jonas, one of Wall Street’s most ardent Tesla (NASDAQ:TSLA) bulls today, has described Elon Musk’s newly proposed $1 trillion performance-based compensation package as a “good deal” for investors.
In a note shared this week, Jonas argued that the package helps align the interests of Musk and Tesla’s minority shareholders, despite its shockingly high headline number.
Future market opportunities
Jonas highlighted Tesla’s longer-term ambitions in robotics as a key factor in his assessment. “Yes, a trillion bucks is a big number, but (it) is rather modest compared to the size of the market opportunity,” Jonas wrote. He added that the humanoid robot market could ultimately surpass the size of today’s global labor market “by a significant multiple.”
“We have entertained scenarios where the humanoid robot market can exceed the size of today’s global labor market… by a significant multiple,” Jonas wrote, as shared on X by Tesla watcher Sawyer Merritt.
The analyst likened the arrival of AI-powered robotics to the transformative effect of electricity, noting that “contemplating future global GDP before AI robots is like contemplating global GDP before electricity.” The Morgan Stanley analyst’s insights align with the idea that as much as 80% of Tesla’s future valuation could be tied to its Optimus humanoid robot program.
Elon Musk’s pay package
Tesla’s board has tied Elon Musk’s proposed compensation package to some of the most ambitious targets in corporate history. The 2025 CEO Performance Award requires the automaker’s valuation to soar from roughly $1.1 trillion today to $8.5 trillion over the next decade, a level that would make Tesla the most valuable company in existence.
The plan also demands a leap in Tesla’s operating profit, from $17 billion in 2024 to $400 billion annually. It also ties the CEO’s compensation to a number of product milestones, including the delivery of 20 million vehicles in total, 10 million active Full Self-Driving subscriptions, 1 million Tesla Bots, and 1 million Robotaxis in operation. Tesla’s board emphasized that Musk’s leadership was fundamental to achieving such ambitious goals, with Chair Robyn Denholm noting the award would align the CEO’s incentives with long-term shareholder value.
Elon Musk
Tesla board reveals reasoning for CEO Elon Musk’s new $1 trillion pay package
“Yes, you read that correctly: in 2018, Elon had to grow Tesla by billions; in 2025, he has to grow Tesla by trillions — to be exact, he must create nearly $7.5 trillion in value for shareholders for him to receive the full award.”

Tesla’s Board of Directors has proposed a new pay package for company CEO Elon Musk that would result in $1 trillion in stock offerings if he is able to meet several lofty performance targets.
Musk, who has not been meaningfully compensated since 2017, completed his last pay package by delivering billions in shareholder value through a variety of performance-based “tranches,” which were met and resulted in the award of billions in stock.
Elon Musk’s new pay plan ties trillionaire status to Tesla’s $8.5 trillion valuation
However, Musk was unable to claim this award due to a ruling by the Delaware Chancery Court, which deemed the payout an “unfathomable sum.”
Now, the company is taking steps to ensure Musk gets paid, as the Board feels that it is crucial to retain its CEO, who has been responsible for much of the company’s success.
This is not a statement to undermine the work of all of Tesla’s terrific employees, but a ship needs to be captained by someone, and Musk has proven he is the right person for the job.
The Board also believes that, based on a statement made by the company in its proxy, various issues will be discussed during the upcoming Shareholder Meeting.
Robyn Denholm and Kathleen Wilson-Thompson recognized Musk’s contributions in a statement, which encouraged shareholders to vote to approve the payout:
“We’re asking you to approve the 2025 CEO Performance Award. In designing the new performance award, we explored numerous alternatives. Ultimately, the new award aims to build upon the success of the 2018 CEO Performance Award framework, which ensure that Elon was only paid for the performance delivered and incentivized to guide Tesla through a period of meteoric growth. The 2025 CEO Performance Award similarly challegnes Elon to again meet a series of even more aspirational goals, including operational milestones focused on reaching Adjusted EBITDA targets (thresholds that are up to 28 times higher than the 2108 CEO Performance Award’s top Adjusted EBITDA milestone) and rolling out new or expanded product offerings (including 1 million Robotaxis in commercial operation and delivery of 1 million AI Bots), all while growing the company’s market capitalization by trillions of dollars.
Yes, you read that correctly: in 2018, Elon had to grow Tesla by billions; in 2025, he has to grow Tesla by trillions — to be exact, he must create nearly $7.5 trillion in value for shareholders for him to receive the full award.
In addition to these unprecedented performance milestones, the 2025 CEO Performance Award also includes innovative structural features, born out of the special committee’s considered analysis and extensive shareholder feedback. These features include supercharged retention (at least seven and a half years and up to 10 years to vest in the full award), structural protections to minimize stock price volatility due to administration of this award and, thereafter, incentives for Elon to participate in the Board’s continued development of a framework for long-term CEO Succession. If Elon achieves all the performance milestones under this principle-based 2025 CEO Performance Award, his leadership will propel Tesla to become the most valuable company in history.”
Musk will have a lot of things to accomplish to receive the 423,743,904 shares, which are divided into 12 tranches.
However, the Board feels he is the right person for the job, and they want him to remain the CEO. This package should ensure that he stays with Tesla, as long as shareholders feel the same way.
Investor's Corner
Elon Musk’s new pay plan ties trillionaire status to Tesla’s $8.5 trillion valuation
Shareholders are expected to vote on the proposal at the annual meeting on November 6.

Tesla’s board has proposed a new compensation package for CEO Elon Musk that could make him the world’s first trillionaire and Tesla the most valuable company in history.
The 2025 CEO Performance Award, outlined in a securities filing on Friday, would be worth up to $900 billion in Tesla stock (NASDAQ:TSLA) if the automaker achieves a series of aggressive performance and valuation goals, according to the New York Times.
Shareholders are expected to vote on the proposal at the annual meeting on November 6.
Tesla is aiming for an insane $8.5 trillion market cap
The package requires Musk to lift Tesla’s market capitalization from about $1.1 trillion today to $8.5 trillion over the next decade. At that level, Tesla would surpass every major public company in existence. Nvidia, currently the world’s most valuable firm, has a market cap of around $4.2 trillion today, as noted in a Motley Fool report. Microsoft and Apple follow at $3.8 and 3.6 trillion each, while Saudi Aramco is valued at around $1.5 trillion.
If Tesla achieves its $8.5 trillion target, it would be worth more than twice Nvidia’s present valuation and nearly eight times its current size. The compensation plan also requires Tesla’s operating profit to grow from $17 billion last year to $400 billion annually.

Elon Musk’s path to a trillionaire status
Apart from leading Tesla to become the world’s biggest company in history, Musk is also required to hit several product targets for the electric vehicle maker. These include the delivery of 20 million Tesla vehicles cumulatively, 10 million active FSD subscriptions, 1 million Tesla bots delivered, and 1 million Robotaxis in operation.
Tesla board chair Robyn Denholm and director Kathleen Wilson-Thompson said retaining Musk is “fundamental to Tesla achieving these goals and becoming the most valuable company in history.” If successful, the plan would raise Musk’s Tesla stake from 13% to about 25%, further consolidating his control. It would also result in the CEO earning $900 billion in TSLA stock, allowing him to effectvely become a trillionaire.
The proposal mirrors a 2018 compensation plan that was invalidated in Delaware court earlier this year in the way that it is focused on very aggressive targets and operational milestones. Tesla has since shifted its corporate registration to Texas, where challenges from potential activist shareholders are less of a risk.
Tesla’s SEC filing can be viewed below.
www-sec-gov-Archives-edgar-data-1318605-000110465925087598-tm252289-4_pre14a-htm… by Simon Alvarez
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