Musk Dismisses Twitter Angst as Tesla Reports Record Sales and Income
- Musk still foresees the US entering a severe recession this year. Still, he suggested Tesla might be able to sell 2 million vehicles in 2023.
- The CEO called Twitter a “powerful tool” for driving Tesla demand and said other major brands should consider the social media platform’s power for selling their wares.
- “I’m looking forward to driving it,” Musk said of the Cybertruck, which should be troubling to those with deposits on the pickup, eagerly awaiting delivery.
Tesla Motors reported 1.31 million deliveries globally last year and $3.9 billion net income for the fourth quarter, for $13.7 billion net income for fiscal year 2022—records for the maverick EV automaker. Word on Wall Street prior to the announcement following close of the stock market Wednesday is that these financial results fall short of investors’ expectations.
CEO Elon Musk is having none of that.
Orders were twice the level of Tesla production in the fourth quarter of 2022, Musk told investors and analysts in the company’s financial results call, flipping some reports that it was quite the opposite (demand at half of production), “and (we) raised the Model Y prices a little because of that.”
Musk followed that up with a contradiction of sorts, saying “Price really matters. … A number of people who want to buy a Tesla can’t afford it. The price change really matters. … The cost of production in Berlin and Austin are depreciating with the growth in production, as you’d expect.”
Tesla forecasts it will build 1.8 million vehicles globally in 2023, barring any supply chain problems or cut in demand from what Musk considers the likelihood that the US will enter a severe recession this year. It could sell 2 million, he suggested.
Prior to release of Tesla’s financial report, there were news reports of protests at Chinese Tesla showrooms over heavy price cuts that affected customers who had already paid pre-discount higher prices. National Public Radio reported Wednesday that the Tesla Model Y was selling below the average transaction price of a new car, which was a bit more than $49,000 at the end of 2022, according to Cox Automotive.
List price of the Model Y on Tesla’s website, during the investor/analyst call Wednesday, was $53,490, or “$40,590 after potential savings,” including the new $7500 federal tax credit under the Inflation Reduction Act. The Model 3 was listed at $43,990, or $32,290 after potential savings. Model S is $94,990 ($88,990 with “potential savings,” which appears to be “money on the hood”), and Model X is $109,990 ($103,990).
Musk (with CFO Zach Kirkhorn also on the call) brushed off angst over his purchase of Twitter, which analysts say has contributed to a 48% drop in Tesla stock’s value over the last year, according to NPR’s Marketplace. One investor asked about a report by the brand analysis firm Morning Consult that Tesla’s customers are turned off by Musk’s politics, as expressed on Twitter.
“I have 127 million followers, and it continues to grow rapidly,” Musk responded in an answer that might objectively be described as “Trumpian.”
“That suggests I’m very popular. … Not popular with everybody.” He called Twitter a “powerful tool” for driving Tesla demand and said other major brands should consider the social media platform’s power for selling their wares (several major advertisers left Twitter after Musk opened the platform to extreme-politics users).
The inevitable question about timing of the Cybertruck seemed almost trivial by contrast, though it remains foremost on every Tesla devotee’s mind.
“I’m looking forward to driving it,” Musk said, which should be troubling to those with deposits on the pickup, eagerly awaiting delivery. Shouldn’t he have at least driven a prototype by now?
Start of production is still on for this summer, Musk said, but SOP isn’t as important as volume production. We won’t see that for the Cybertruck until 2024, Musk said, essentially backing AutoForecast Solution’s astute analysis, as reported here.
Musk also said Tesla is well ahead of the industry on full-self driving. “I don’t think you can even see second-place with a telescope. At least, we can’t.” And he said the automaker has “a lot of products in development. We’re not going to announce them, obviously, but they’re very exciting.”
Which brings up a question that came at the end of the analysts’ call, whether Tesla—which claims to have the highest profit margins in the business and sold more vehicles of any power source than any other luxury/premium brand in the US last year—can reduce its costs sufficiently to offer an EV priced below $25,000 or $30,000.
“We would be jumping the gun on future announcements,” Musk replied.
Do you think Tesla will widen its sales and production lead over other EV producers in 2023? Please comment below.