The company’s fourth quarter saw a decrease in gross profit margin, while Tesla's overall share of profits from automotive sales slipped. EBITDA margins also decreased in Q4. While overall free cash flow improved in 2022, the fourth quarter saw net cash from operating activities decrease by 29 per cent, while free cash flow shrunk by nearly half.
Tesla's stock price was still up slightly on the news, but given that its value has halved since January 2022 it has a long way to go.
Some of this might be due to the way that Tesla spun its results to the great unwashed. According to Tesla the electric car maker brought in $24.32 billion in revenue in the final three months of 2022 – a 37 per cent year-over-year increase. Earnings per share were up 40 per cent year-over-year to $1.19, and both figures beat Wall Street's expectations. Profit from the quarter amounted to $3.7 billion, up 59 per cent.
It is all numbers, we guess and it just depends on which ones you choose to look at.
Musk claimed that he was hoping that a recession to bring expenses down.
"If the recession is a serious one and I think it probably will be, but I hope it isn't, that would lead to meaningful decreases in almost all of our input costs," Musk said. Of course, if there is a recession we would not have thought that people could afford expensive items like Teslas, but then again we are not business geniuses.
Tesla missed its growth objectives for 2022 and delivered fewer vehicles than analysts expected, though deliveries were still up year-over-year, as was production. The automaker slashed prices around the globe a few weeks ago. Price cuts were necessary to conform to new electric vehicle incentives.
Musk claimed Tesla's year-to-date orders have been the strongest in the automaker's history and are outselling the production rate by almost double. That would be a turnaround from the end of 2022, when Tesla reported producing 439,701 cars and delivering 405,278 of them.
"Demand far exceeds production, and we are making some small price increases as a result," Musk said.
Musk told shareholders that his popularity on Twitter was having a knock-on effect on the Tesla brand.
"Let me check my Twitter account. OK, so I've got 127 million followers. It continues to grow very rapidly. That suggests that I'm reasonably popular. I think
Twitter is actually an incredibly powerful tool for driving demand for Tesla," he said.
Other Tesla products are going the way of Musk’s promise that we would all be able to buy affordable robots last year.
When asked if the Cybertruck would enter production in the middle of 2023, Musk said it would begin "maybe sometime this summer."
He noted that the start of production is a slow process, "so I wouldn't put too much stock in start of production. It's kind of when does volume production actually happen, and that's next year."
Tesla is facing concerns that its driving technology is not up to snuff. Consumer Reports released details of its test of 12 active driver assist systems this week, which found Tesla's Autopilot was falling behind innovations from Ford, GM and other established automakers as concerns over the safety of Tesla's tech continue to grow.
Musk said during the call that an update to Autopilot was recently released to add full self-driving support on city streets, and the system showed clear safety improvements.