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Musk’s Tesla reports record revenue

By Sarah May on
 January 26, 2023

In an impressive result certain to please CEO Elon Musk, electric vehicle manufacturer Tesla reported its quarterly earnings on Wednesday, surpassing expectations in both earnings and revenue metrics, as CNBC reports.

The $24.3 billion in revenue reported by the company for the fourth quarter set a new record for the firm, and according to Musk, demand for its vehicles continues to exceed available supply.

Results lift shares

On the heels of Wednesday's earnings report and optimistic comments from Musk, Tesla shares rose by over 11% Thursday morning, even though some analysts remained hesitant about the company's overall outlook.

While delivering its quarterly numbers, Tesla did note that sale prices on its cars have “generally been on a downward trajectory for many years,” the company also emphasized the importance of “affordability” for buyers if its volume is to increase exponentially in future years.

As The Hill reported earlier this month, the automaker recently slashed prices on models sold in the United States as well as in Europe, building on reductions made earlier on cars sold in China, with industry experts suggesting that the reductions were made due to softening demand and impending price caps on new tax credits.

Despite angering some recent Tesla buyers who paid higher prices for the same vehicles, the price cuts appear to have spurred demand, as CNBC noted, with Musk telling investors Wednesday, “Thus far in January we've seen the strongest orders year-to-date than ever in our history. We're currently seeing orders of almost twice the rate of production.”

Promising production

Tesla further indicated that its production for 2023 would be in the 1.8 million vehicle range, though given its recent efforts at boosting volume coming from new factories, that number sparked questions from some analysts.

In response, Musk explained, “We're saying 1.8 because there always seems to be some friggin' force majeure thing that happens somewhere on Earth.”

“We don't control if there's earthquakes, tsunamis, wars, pandemics, etc. If it's a smooth year, without some big supply chain interruption or massive problem we have the potential to do 2 million cars this year. I think there would be demand for that, too,” added Musk.

The company reiterated its ambitious plans simply by noting, “We are planning to grow production as quickly as possible in alignment with the 50% compound annual growth rate target we began guiding to in early 2021.”

Dual role questioned

During Tesla's earnings presentation, shareholders inquired as to how Musk intends to protect the company's brand from potential backlash stemming from his role as CEO of Twitter as well as his own politically outspoken nature.

Musk did his best to dismiss those concerns, declaring Twitter to be a valuable vehicle for making connections with current and future Tesla owners.

“I've got 127 million followers. And it continues to grow rapidly,” Musk said of his presence on the platform he helms. “That's, that suggests that I'm reasonably popular. I might not be popular with some people. But for the vast majority of people, like the follower count speaks for itself.”

Musk further asserted that “Twitter is actually an incredibly powerful tool for driving demand for Tesla. And I really encourage companies out there of all kinds of automotive or otherwise to make more use of Twitter and to use their Twitter accounts in ways that are interesting and informative, entertaining, and it will help drive sales just as it has with Tesla.”

Scrutiny continues

The shareholder query was certainly not the first time Musk has had to respond to concerns about his concurrent roles as CEO of both Tesla and Twitter, as just last month, Sen. Elizabeth Warren (D-MA) sent a detailed letter to Robyn Denholm, chair of the automaker's board, outlining her concerns about potential conflicts of interest, misappropriation of company assets, and other scenarios she believes could cause harm to the firm's shareholders.

“Musk may decide to run the company to maximize badly-needed revenue, even if that includes great deals for Tesla's competitors and potential injury to Tesla,” Warren wrote, referencing a sizable drop in market value seen by the company in 2022.

Warren continued, saying, “Musk could decide he is personally better served if Tesla overpays Twitter for advertising or pays up front to give Twitter access to much-needed cash.”

In light of the positive news coming out of the earnings report on Wednesday, however, it seems likely that Musk feels quite comfortable dismissing the issues raised by the lawmaker he once dubbed “Senator Karen” and likened to “my friend's angry Mom [who] would just randomly yell at everyone for no reason,” happily forging ahead with his expansive plans for growth.