Profit jump at car company: Tesla record brings billions to Musk

Status: 04/21/2022 09:34 am

After a record quarter, Tesla boss Elon Musk can look forward to compensation that brings him another $ 23 billion. This will make it easier for him to buy the short message service Twitter.

Elon Musk has every reason to smile. Between January and March, his electric car company Tesla defied the difficult conditions in the car market with global supply chain problems and rising prices from suppliers. With new records in revenue and profit, the group exceeded the expectations of the analysts, in some cases significantly.

Yesterday, after the US stock market closed, Tesla announced that it had increased sales by 81 percent to $18.8 billion in the first quarter. Net income soared 658 percent to $3.3 billion. In addition, Tesla delivered 310,000 cars – more than ever before.

Tesla outsmarts inflation

The starting conditions for new records were by no means ideal: Musk said that inflation in the supply of components was underestimated – some suppliers had increased prices by 20 to 30 percent. Above all, the rising prices for lithium are a challenge.

But at least in the first quarter, the Tesla boss successfully countered the effects of inflation by raising prices for his electric car models. “Price inflation is well above cost inflation,” said Craig Irwin, senior research analyst at Roth Capital. According to analysts, further price increases in the course of the year cannot be ruled out.

Numbers hat-trick boosts Musk’s fortune

Tesla’s record quarter has had an immediate impact on the company’s CEO’s fortune. Musk – already the richest person in the world at $263 billion according to Forbes’ “Real-Time Billionaires” list – is likely to be a further $23 billion richer.

Because the number hat-trick triggers three payment tranches. Each gives Musk the opportunity to buy 8.4 million Tesla shares at a price of $70.01 each – a discount of more than 90 percent on Wednesday’s closing price on the Nasdaq ($977.20). This results in a price gain of $23 billion in total, or just under $7.7 billion per tranche.

Is Musk Selling Tesla Stock For Twitter Buy?

This should reignite speculation that Musk may sell some of his Tesla shares to finance the Twitter purchase. Musk announced last week that he wanted to take over the short message service Twitter for more than $40 billion.

Some industry experts fear that the controversial project and the associated debate about freedom of expression on the Internet could distract the entrepreneur from the Tesla business.

Tesla is stalking Audi

Musk has big plans for this year with Tesla. The company boss plans to build more than 1.5 million vehicles in 2022. This would bring Tesla very close to the VW premium subsidiary Audi, which brought almost 1.7 million vehicles to its customers last year.

The US group was also confident that it would be able to increase deliveries by 50 percent annually for several years – this year 60 percent could possibly be achieved. Investors were pleased with the numbers and the outlook, Tesla shares climbed six percent in US after-hours trading.

No concrete schedule for Grünheide

The new factory in Grünheide should also help with the expansion. In the long term, around 500,000 e-cars are to roll off the assembly line there every year, but the company is still a long way from that. Musk did not name a specific timetable for Grünheide.

In a conference call with analysts and investors, he said only that the expansion of production will be supported by a team of experienced employees and that the company has learned a lot from the start of production of the Model Y at its US headquarters in Fremont and in Shanghai.

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