Tesla (NASDAQ: TSLA) announced its 2022 Q1 financial results on April 20, 2022. According to the announcement, total revenues were up 81%. In addition, operating income and net income were up 507% and 658%, respectively. Adjusted EBITDA was up 173%.
Under the inflationary environment of 2022 Q1, industrial prices have drastically risen. However, Tesla has improved its gross and operating margins to 32.9% and 19.2%, respectively. These figures are each up 636bp and up 1349bp year over year. In addition, the free cash flow was 1,828 million USD, and the FCF margin was 9.8%.
From 2022 Q4 to 2022 Q1, Berlin Gigafactory and Texas Gigafactory began their operation. Accordingly, Tesla continuously reduces their transportation and production costs through local and large-scale production.
In addition, Tesla continues to improve battery technology to diversify battery materials. It is because that batteries are the most expensive component of electric vehicles. According to the announcement, more than half of the batteries manufactured by Tesla in 2022 Q1 were nickel- and cobalt-free lithium-iron phosphate (LFP) batteries. Accordingly, Tesla reduced production costs by reducing the excessive dependency on rare metals. It is speculated that these efforts brought Tesla’s improved gross and operating profit margin.
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