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Tesla overcomes supply chain problems with major deliveries in the fourth quarter




A Tesla Model 3 car was seen in their showroom in Singapore October 22, 2021. Photo taken October 22, 2021. REUTERS / Edgar Su

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January 2 (Reuters) – Tesla Inc (TSLA.O) on Sunday reported record quarterly deliveries that far exceeded Wall Street estimates, and got rid of global chip shortages as increased production in China.

It was the sixth quarter in a row that the world’s most valuable car manufacturer posted record deliveries.

Tesla, led by billionaire CEO Elon Musk, delivered 308,600 vehicles in the fourth quarter, far higher than analysts’ forecasts of 263,026 vehicles.

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Tesla’s deliveries from October to December were up about 70% from the previous year and almost 30% higher from record deliveries in the previous quarter.

“Great work by the Tesla team worldwide!” wrote Musk on Twitter.

His electric car company increased production in China even though competition increased and regulatory pressure increased following consumer complaints about product safety.

Tesla sends China-made models to Europe and some Asian countries.

On an annual basis, the car manufacturer increased its deliveries by 87% from a year earlier to 936,172 vehicles in 2021.

Musk said in October last year that Tesla would be able to maintain an annual growth rate of more than 50% for “a good while”.

NEW FACTORIES

“They have beaten all odds,” said Gene Munster, managing partner of venture capital firm Loup Ventures, on Sunday.

“The first is the demand for their products is through the roof. And the second is that they are doing a good job of meeting that demand,” he said.

Munster said he expected Tesla’s deliveries to grow to 1.3 million vehicles this year despite headwinds in production at the new factories and supply chain problems.

Tesla’s CFO Zachary Kirkhorn said in October that it was difficult to predict how quickly the company would be able to increase production at new factories in Texas and Berlin, which will use new vehicle technologies and new teams.

Tesla said in October that they aimed to build their first production cars at both facilities by the end of 2021, but it is not known if that goal will be reached. Tesla did not respond to a question from Reuters about the plants. The factory in Berlin had originally been planned to start production last summer.

Deutsche Bank said in a report on Friday that they expect Tesla to deliver almost 1.5 million vehicles this year, although chip shortages are still a risk to production.

‘SUPER CRAZY’ MISSING

In 2020, car manufacturers cut chip orders as the pandemic and shutdown measures hit demand. But Tesla never reduced its production forecast with suppliers to support the rapid growth plan, which helped it cope with the shortage, Musk said.

Tesla, which designs some pieces internally unlike most automakers, also reprogrammed software to use smaller scarce pieces, according to Musk.

Musk, who previously said, “2021 has been the year of super-insane supply chain shortages,” said in October that he was optimistic these problems would pass in 2022.

The strong sales came even after Tesla raised US vehicle prices sharply this year to compensate for higher supply chain costs.

Tesla reached over $ 1 trillion in market value in October after the rental car company Hertz said it ordered 100,000 of its cars. The company’s shares lost some ground after Musk wrote on Twitter in November that he was considering selling 10% of his stake in Tesla. read more

Overall, Tesla shares rose 50% last year.

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Reporting of Hyunjoo Jin in San Francisco, Nivedita Balu and Sneha Bhowmik in Bengaluru; Edited by Daniel Wallis and Mark Porter

Our standards: Thomson Reuters Trust Principles.



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