Tesla Q1 - Record Profits

Tesla reported record profits again last night, with earnings per share of $3.22 versus the $2.27 that was expected. The company did caution that their production system is really battling currently with supply constraints and volatile pricing of key components.

The strong beat was thanks to a pleasing increase in gross profit margins in the automotive division, to 33%, higher than the 28% the street had penciled in. The margin improvement was due to lower production costs, which bodes well for the possibility of an even cheaper Tesla in years ahead.

Elon Musk said he thought that the closure of the Shanghai factory will end soon and that lost production will be made up. There are reports of staff sleeping at the factory, to circumvent lockdowns. Management has forecast growth in vehicle sales to remain at 50% in 2022 from 2021.

The energy division grew sales by 25% from a year earlier, but only contributed revenue of $616 million, compared to the automotive division's $16.8 billion. Musk is on record saying that he expects the energy division to be as big in time, so stay tuned.

Tesla is a growth machine, justifying its $1 trillion valuation. Truly, an amazing feat!