Tesla soars after earnings surprise

Following yesterday's earnings call, shareholders of Tesla stock are pleased to see a "comeback" after a tough few months. Shares surged over 10% in the morning and continue to trade with high volume as a result of the electric carmaker's earnings beat and rosy outlook for 2023.

Above: Tesla's stamping presses at Gigafactory Shanghai (Source: Tesla)

Let's take a look at seven key takeaways from the Tesla's fourth quarter shareholder letter and earnings call yesterday.

1. 2022 was a 'fantastic' year

Elon Musk explained, "It was a fantastic year for Tesla. It was our best year ever on every level... in 2022, we delivered over 1.3 million cars and achieved a 17% operating margin, the highest among any volume carmaker, I think maybe among any carmaker."

CFO Zach Kirkhorn reflected on the past year's accomplishments: "On a full year basis, revenue increased over 50%, operating income doubled, free cash flows increased over 50%, and our margins remained industry-leading." In addition to the vehicle side of the business, he added that "the energy business had its strongest year yet across all metrics."

2. Demand is surging in 2023

Musk noted that after Tesla's recent price drops, "Demand far exceeds production... we've seen the strongest orders year-to-date than ever in our history. We currently are seeing orders at almost twice the rate of production."

3. Understanding the value of full self-driving 

Regarding Full Self-Driving, Musk notes: "every time we sell a car, it has the ability, just from uploading software, to have full self-driving enabled... And then, when it becomes fully autonomous, that is a value increase in the fleet. That might [turn out to] be the biggest asset value increase of anything in history."

4. Cybertruck is coming 

Musk commented that Cybertruck production will start slowly: "sometime this summer... [and] will not be a significant contributor to the bottom line, but it will be next year. So it's an incredible product. I can't wait to drive it personally. It will be the car that I drive every day."

5. An upbeat forecast

According to Musk, vehicle production should range somewhere between 1.8 million and 2 million: "our internal production potential is actually closer to 2 million vehicles, but we were saying 1.8 million... so if it's a smooth year, actually, without some big supply chain interruption or massive problem, we actually have the potential to do 2 million cars this year."

6. Tesla's vehicle roadmap is 'exciting'

With future vehicles, Musk teased: "we have other products in development. We're not going to announce them, obviously, but they're very exciting. And I think it will blow people's minds when we reveal them. Tesla has the most exciting product road map of any company on earth by a long shot." More will likely be shared on March 1st during Tesla's upcoming Investor Day.

7. Shareholders should expect growth

Regarding the future for the stock, Musk predicts: "there's going to be bumps along the way... But long term, I am convinced that Tesla will be the most valuable company on earth."

While it's difficult to predict what's coming, if we look through the rear view mirror, it's clear that Tesla's experienced some impressive growth as evidenced in the charts below (courtesy of Yahoo Finance).

Above: A look at Tesla's performance from 2016 -2022 (Charts: Yahoo Finance)

If these trends continue, shareholders might want to buckle in for a fast-paced, exciting road ahead.


Source: Tesla; Charts: Yahoo Finance