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Tesla (TSLA) achieved a ~17% operating margin in 2022, the best of any volume carmaker, demand is ever-higher, Musk on earnings call — Q4 report, more


Tesla (TSLA) CEO Elon Musk and other top executives conducted the company’s Year 2022 and Q4 2022 Earnings Call on Wednesday last week. Simultaneously, the automaker released the financial update report for 2022 and the year’s last quarter.

Elon Musk’s opening remarks for Q4 and 2022 revealed some interesting financial, operational, and production goals that the company achieved last year. He also put investors’ concerns about the demand for Tesla vehicles to rest by giving a thorough answer to this burning question that has been getting frequently asked lately.

“It was a fantastic year for Tesla, it was our best year ever on every level,” Musk started the Tesla Q4 2022 earnings call with these words.

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Tesla achieved an operating margin of around 16.8% in the year 2022 and 16.0% in Q4. Musk said that a ~17% operating margin is the highest among any volume carmaker in the world. “Doing so, we have generated $12.5 billion dollars in net income and $7.5 billion in free cash flow,” Musk quoted the figures from the Q4 2022 report (full PDF below).

“Importantly, the Tesla team achieved these records, while, despite the fact that 2022 was an incredibly challenging year due to 4 shutdowns, very-high interest rates, and many delivery challenges,” Elon Musk further explained.

Besides achieving the highest operating margins and profit per vehicle, Tesla delivered a record number of 1.3 million vehicles in 2022. Both Q4 2022 and the year 2022 were new records for the automaker in terms of vehicle deliveries.

Tesla (TSLA) quarterly financial summary from Q4 2021 to Q4 2022. Source: Tesla 2022 Update (PDF below).

Tesla’s automotive revenues grew 31% in Q4 2022 compared to the same quarter last year. Automotive gross profit also grew by 13% for the same period.

We can see some more interesting facts in the following chart. Compared to the entire 2021, Tesla’s automotive revenues grew by a staggering 51%. And the automotive gross profit went up by 47%.

Tesla (TSLA) yearly financial summary and growth comparison from 2018 to 2022. Source: Tesla 2022 Update (PDF below).
A Reuters report released in November 2022 suggested that Tesla is earning the highest per-vehicle profit margin of $9,754 compared to Toyota in 2nd position which is making $1,273 per vehicle.

Elon Musk also addressed investors’ concerns over the low demand for Tesla vehicles. “Thus far in January, we’ve seen the strongest orders year-to-date than ever in our history,” he said.

Usually, the start of the year, especially January is notorious for low sales in the automotive industry. But the automaker has been experiencing a surge in vehicle orders driven mainly due to Tesla’s current price cuts and potential federal tax credits.

“Basically, price really matters. I think there’s a vast number of people that want to buy a Tesla car but can’t afford it and so these price changes really make a difference for the average consumer,” Musk explained.

“It has always been our goal to make cars that are affordable to as many people as possible, so, I am glad that we’re able to do so,” he added.

Musk also revealed that Tesla is currently receiving orders twice as much as the electric automaker can produce. However, he also said that it’s hard to say if this rate of orders is sustainable even in the coming months.

Elon Musk also pressed the fact that the cost of production at Giga Texas and Giga Berlin are dropping as these Tesla factories are producing more and more cars.

Video: Listen to Tesla’s Q4 and full-year 2022 earnings call (Financial Results and Q&A webcast with Elon Musk and other TSLA executives).

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Tesla Q4 2022 and Year 2022…



By Iqtidar Ali

Iqtidar has been writing about Tesla, Elon Musk, and EVs for more than 3 years on, many of his articles have been republished on CleanTechnica and InsideEVs, maintains a healthy relationship with the Tesla community across the Social Media sphere. You can reach him on Twitter @IqtidarAlii

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