Tesla overcomes supply chain problems with Q4 shipments

By Hyunjoo Jin and Nivedita Balu

(Reuters) – Tesla Inc reported on Sunday a record quarterly shipment, far exceeding Wall Street calculations, which boosted production in China in the face of a shortage of chips.

It was the sixth consecutive quarter that the world’s most valuable auto manufacturer set a record.

Tesla (NASDAQ :), led by CEO Elon Musk, delivered 308,600 vehicles in the fourth quarter, much higher than analysts forecast for 263,026 vehicles.

Tesla’s October-December shipments were up about 70% from a year earlier and nearly 30% more than in the previous quarter.

“Great work from the Tesla team all over the world!” Musk wrote on Twitter (NYSE :).

Its electric car company boosted production in China, despite growing competition and increased regulatory pressure over product safety following consumer complaints.

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

Every year, the automaker increased its shipments by 87% from a year earlier to 936,172 vehicles in 2021.

Musk said in October last year that Tesla could maintain a growth rate of more than 50% a year “for a considerable amount of time.”

NEW FACTORIES

“They’ve passed all the tests,” Gene Munster, managing partner of venture capital firm Loup Ventures, said Sunday.

“The first is that the demand for their products is going through the roof. And the second is that they are working hard to meet that demand,” he said.

Munster said it expects Tesla’s shipments to grow to 1.3 million vehicles this year, despite wind turbines in production at its new plants and supply chain problems.

Tesla Chief Financial Officer Zachary Kirkhorn said in October that it was difficult to predict how quickly the company would boost production at new factories in Texas and Berlin, which would use new vehicle technology and new equipment.

Tesla said in October that it planned to build its first production car at two facilities by the end of 2021, but it is not known whether it met that goal. Tesla did not answer Reuters when asked about the plants. His Berlin factory was originally scheduled to start production last summer.

Deutsche Bank (DE 🙂 said in a report on Friday that Tesla expected to ship nearly 1.5 million vehicles this year, although chip shortages remain a risk to production.

SUPER CRAZY SHORTS

In 2020, car manufacturers cut chip orders as pandemics and blockade measures met demand. But Tesla never lowered its production forecast with suppliers to support its growth plan, which helped it deal with chip shortages, Musk said.

Tesla, unlike most automakers, which designs some chips internally, also reprogrammed the software to use fewer chips, according to Musk.

Musk said in October that “2021 supply chain shortage has been a very crazy year,” he said he was optimistic that these issues would be overcome in 2022.

Strong sales also came this year after Tesla significantly raised U.S. vehicle prices to offset higher supply chain costs.

Tesla achieved a market capitalization of more than $ 1 trillion in October after the Hertz car rental company said it had ordered 100,000 of its vehicles. The company’s shares were slightly lost in November after Musk wrote on Twitter that it was considering selling 10% of its stake in Tesla.

Overall, Tesla shares gained 50% last year.