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Tesla profits rocket despite price cuts

Expansion: Tesla will pump more than £2.9billion into its Nevada site to build two new factories, one to build its long-awaited electric semi-trailer (pictured) and another for its 4680 battery

Tesla profits soar despite price cuts as electric car giant announces £3bn gigafactory expansion plan

Tesla announced record results after its highest number of vehicle deliveries.

The electric carmaker has revealed profit of £11.4bn for 2022, up 85% year on year, while revenue rose 51% to £65.7bn.

It follows a fourth quarter profit for the group of £3.3bn, 43% more than in 2021 and beating market expectations.

Expansion: Tesla will pump more than £2.9billion into its Nevada site to build two new factories, one to build its long-awaited electric semi-trailer (pictured) and another for its 4680 battery

Expansion: Tesla will pump more than £2.9billion into its Nevada site to build two new factories, one to build its long-awaited electric semi-trailer (pictured) and another for its 4680 battery

The results came after the company delivered a record 405,278 electric cars in the last three months of the year. Some 439,701 vehicles rolled off its production lines during the period, also an all-time high.

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Those numbers mean Tesla’s 2022 delivery numbers hit a record high of more than 1.3 million as the company kicked off production at new factories in Texas and Germany.

The results follow a series of steep price cuts by Tesla in the United States, Europe and China, as it seeks to protect itself against growing competition from other automakers as they try to impose in the sector.

Although the company acknowledged that its average selling prices had been “generally on a downward trajectory for many years”, it stressed that there was “need” to strengthen affordability and that despite the reductions, its profit margins had increased over time. Shares of the company fell slightly in after-hours trading on Wall Street.

The findings came after Tesla unveiled plans for a multibillion-pound expansion of its Nevada gigafactory as it pushes ahead with plans to mass-produce a new battery and its electric semi-truck both expected.

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The automaker will pump more than £2.9 billion into the site to build two new factories, one to build the truck and another its 4680 battery.

The 4680 is a key component for Tesla to achieve its goal of halving battery costs and increasing power cell production by 100 by the end of the decade.

Meanwhile, Tesla’s results will bring some comfort to its boss Elon Musk, the world’s second richest man, who is currently locked in a court battle amid allegations he defrauded investors after he tweeted in August 2018 that he had “secured funding” to take Tesla private.

The tweet sent the company’s share price soaring, but then fell when it became clear that a deal had not been reached.

On Tuesday, Musk told a jury in San Francisco that he had “no bad motive” and that he could have secured funds from several private investors to finance a takeover.

But he admitted he had no binding agreements from investors to provide the necessary cash.

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Meanwhile, Musk is spearheading an effort to boost the fortunes of Twitter, the social media website he bought for £36billion last year after a protracted legal battle sparked when he attempted to back out of the acquisition.

The company is suffering from falling advertising spending as the global economy slows, while Twitter has also found itself the victim of a lawsuit brought by the Crown Estate over unpaid rent for its London headquarters.

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