Tesla CEO Elon Musk Expects Record Earnings: Cybertrucks and New Factories are in Front
Tesla has performed much better than other automakers during the global supply chain crisis.
Key Highlights
- Tesla is expected to report record revenue on Wednesday, but analysts and investors are focused on how quickly Tesla can ramp up production at two new factories this year, given the uncertainty created by technology changes, battery and other supply chain constraints.
- Elon Musk's CEO promises an updated product roadmap on Wednesday, with an emphasis on the launch dates for Cybertruck and a hoped-for $25,000 (approximately Rs.
- Establishment of new factoriesAccording to analysts, Tesla's two new factories in Texas and Berlin could eventually double the company's production capacity, but it is unclear whether Tesla has begun production.
- Tesla is expected to deliver the first vehicles equipped with its own 4680 battery early this year, but it is unclear when it will be able to mass produce the batteries.
- As early as 2023, Panasonic, Tesla's primary battery supplier, will begin producing new Tesla batteries in Japan as early as 2023, the Nikkei reported on Monday.
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Tesla is expected to report record revenue on Wednesday, but analysts and investors are focused on how quickly Tesla can ramp up production at two new factories this year, given the uncertainty created by technology changes, battery and other supply chain constraints.
Elon Musk's CEO promises an updated product roadmap on Wednesday, with an emphasis on the launch dates for Cybertruck and a hoped-for $25,000 (approximately Rs. 18 lakh) electric car.
"I would not be surprised if Tesla faces significant manufacturing challenges as it scales up production of new vehicle structures and batteries," Guidehouse Insights analyst Sam Abuelsamid said.
According to Refinitiv data, Tesla outperformed other automakers during the global supply chain crisis, producing a record number of vehicles and forecasting a 52 percent increase in revenue to $16.4 billion (roughly Rs. 1,22,670 crore) in the fourth quarter.
Automotive gross margins, excluding regulatory credits, are expected to remain flat or slightly higher than in the prior quarter, despite an inflationary environment that has a negative impact on component costs, according to Gene Munster, managing partner of venture capital firm Loup Ventures.
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Establishment of new factories
According to analysts, Tesla's two new factories in Texas and Berlin could eventually double the company's production capacity, but it is unclear whether Tesla has begun production.
Musk stated that the new factories will employ advanced manufacturing techniques such as casting the vehicle's body in two or more pieces and integrating next-generation batteries into the vehicle's body.
While the new technologies would help reduce the number of vehicle components, thereby simplifying manufacturing and lowering costs, Musk warned in 2020 that they could pose a "significant production risk."
Additionally, investors will want to hear about the supply chain's outlook, as automakers are under pressure to meet demand for electric vehicles.
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4680 rechargeable batteries
Tesla is expected to deliver the first vehicles equipped with its own 4680 battery early this year, but it is unclear when it will be able to mass produce the batteries.
As early as 2023, Panasonic, Tesla's primary battery supplier, will begin producing new Tesla batteries in Japan as early as 2023, the Nikkei reported on Monday. According to Reuters last year, LG Energy Solution also planned to begin production of the 4680 cells in 2023.
Cybertruck
Musk unveiled Tesla's futuristic electric pickup trucks in 2019, aiming to establish a foothold in the lucrative and popular US market segment.
Musk, who has a history of missing his self-imposed launch dates, has already postponed Cybertruck production until late 2022. A source told Reuters that Tesla intends to begin initial production of the much-anticipated model in early 2023, adding that the company will make changes to the model's features and functionality from its original version.
"This is the first time Tesla has introduced a vehicle with significant competition," said Sam Fiorani, vice president at AutoForecast Solutions, referring to Ford and Rivian, which have announced plans to increase production.
Due to the difficulty of breaking into the US truck market—which is dominated by the "Big Three" American automakers—Tesla is more likely to target "weekend warriors or lifestyle buyers" than traditional commercial buyers, he said.
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Electric vehicles starting at $25,000
Musk promised in 2020 that Tesla would offer a self-driving electric car for $25,000 (approximately Rs. 18 lakh) within three years.
Tesla vice president Lars Moravy stated in October that the company would not add new vehicles while battery cells remained scarce and that existing models would be prioritised for production.
"Longer-term investors care about Model 2," Munster said, noting that at current vehicle prices, Tesla would be unable to grow volume by 50% annually.
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