Tesla showed Strong Business Performance in 2022 Q4

Tesla (NASDAQ: TSLA) announced its 2022 Q4 financial results on January 25, 2023. According to the announcement, total revenues, income from operations and net income were up 37%, 49% and 59%, respectively (3 months, YoY). Adjusted EBITDA was up 32%. Also, in 12 months, total revenues, income from operations and net income each were up 51%, 109% and 128% (TTM, YoY). As shown by these figures, Tesla have shown superior business performance in FY2022. 

Net cash provided by operating activities were decreased by 29% (3 months, YoY). In addition, free cash flow was down 49%. The decline in operating cash flow seems to be attributable to changes in operating assets and liabilities.

Moreover, Tesla recorded automotive gross margin of 25.9 % (down 466 bp, 3 months, YoY). In addition, operating margin was 16.0% (up 129 bp).

tesla's driving seat
Photo by Bram Van Oost on Unsplash

According to the announcement, increase in average selling price (ASP) and growth in vehicle delivery have contributed to the improvements of Tesla’s profitability. Especially, vehicle delivery grew 31% in 2022 Q4 (YoY, 3 months). There figures were recorded under the impact of lockdowns in the Greater China.

In addition, Tesla has released FSD Beta. Tesla is offering it on a one-time purchase or subscription basis. Generally, subscription fees could improve company’s cash conversion cycle.

Tesla is currently continuing to development of factories in some regions. It might reduce delivery-related costs in near future. In addition, improvement of the efficiency in the manufacturing process could also reduce manufacturing costs. Tesla’s income margins may continue to be improved in the future.

Tesla, Inc. (NASDAQ: TSLA) Stock Chart

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  1. Watanabe & Brothers’ Investment is holding shares of Tesla.
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