Recently, Tesla announced its third quarter financial report for 2022, in which cash and marketable securities increased by US$2.2 billion to US$21.1 billion; GAAP operating profit was US$3.7 billion, and operating profit margin was 17.2%. GAAP net profit in the third quarter was US$3.3 billion. In the third quarter, the installed capacity of the energy storage business reached a new record of 2.1 gigawatt hours, and the company began to transition to a more stable delivery and production structure.
The inflation rate of raw material costs, as well as the reduced efficiency caused by the ramp-up of Berlin Gigafactory, Texas Gigafactory, and 4680 battery production, have all affected Tesla's profit margins. Additionally, the U.S. dollar continues to appreciate compared to all other major currencies in the market.
Automobile production capacity
Tesla remains focused on increasing vehicle production as quickly as possible by increasing weekly production in Fremont and Shanghai, and ramping up production in Berlin and Texas. Although the situation has improved, logistical fluctuations and supply chain bottlenecks remain looming challenges. It is worth noting that battery supply chain constraints will be a major limiting factor for the mid- to long-term growth of the electric vehicle market.
Output at every factory hit a record high in the third quarter. While there were fewer parts supply issues during the quarter, vehicle transport capacity during peak delivery periods became increasingly challenging. We are gradually moving towards a more balanced production and delivery structure for different regional markets.
United States: California and Nevada
Continue to implement solutions to further increase production at the Fremont facility. The production rate of Model Y in Texas continued to increase month by month during the quarter. In the third quarter, the total production volume of 4680 battery cells (cells sent for conversion) increased three times compared with the previous quarter. The first phase of delivery of Tesla's electric truck Semi is scheduled to start in December 2022.
China: Shanghai
After experiencing a slowdown in production in the second quarter, the Shanghai Gigafactory's third-quarter production rate exceeded the previous quarterly record. The Shanghai Gigafactory remains Tesla's main export hub, supplying cars to most markets outside of North America.
Europe: Berlin-Brandenburg
Thanks to the strong improvement in production efficiency at the end of the third quarter, the German team produced more than 2,000 Model Y units equipped with 2170 batteries in a single week. The factory's capacity ramp-up progress was in line with expectations.
Battery, powertrain and manufacturing
At the Texas Gigafactory, Tesla Model Y has been produced since the beginning of this year. It adopts the structure of integrated die-casting of the front and rear body and structural battery pack. Except for Tesla's factories in Fremont and Shanghai, castings of this large size have never been mass-produced in any industry before. Part of the challenge in producing such a large casting, which eliminates more than 170 individual components, isAluminum needs to be injected into the mold through a single inlet in a tenth of the blink of an eye without solidifying or deforming. Before the end of this year, it is planned to also launch structural battery packs and front body integrated die-cast structures at the Berlin-Brandenburg Gigafactory.
Energy Storage
In the third quarter, energy storage installed capacity increased 62% year-on-year to 2.1GWh (gigawatt hours), which is the highest level Tesla has reached so far. Tesla has achieved this level of growth despite challenges in the semiconductor industry still affecting the energy storage business more than the automotive business. Consumer demand for energy storage products still exceeds Tesla's ability to supply it. In Lathrop, California, Tesla's Megapack factory with a planned production capacity of 40GWh (gigawatt hours) is ramping up production to meet growing market demand.
Services and others
Services and other business revenue hit a record high. Supercharging revenue has more than tripled compared to last year, and Tesla is working to further accelerate deployment. Affected by the sales of used cars and accessories, gross profit from services and other businesses also hit a record high in the third quarter. Tesla will continue to move fees from fixed to fluctuating prices at more Superchargers to better manage vehicle traffic at our Supercharger sites.
Outlook
Output
Tesla plans to increase production capacity as soon as possible. Over the next few years, vehicle deliveries are expected to grow at an average annual rate of 50%. The rate of growth depends on Tesla's equipment capacity, factory uptime, operational efficiency, and the capability and stability of its supply chain.
Cash flow
Tesla has sufficient liquidity to support product planning, long-term capacity expansion plans and other expenditures.
Profit
Tesla will continue to innovate to reduce manufacturing and operating costs. Over time, Tesla hopes that along with the growth of hardware-related profits, software-related profits will achieve accelerated growth.
Products
The ramp-up rate of factory production in Austin and Berlin will be affected by the successful introduction of many new products and new manufacturing technologies in new production locations, as well as ongoing supply chain challenges. It takes a certain amount of time to ramp up factory production capacity, and the same is true for the Texas and Berlin factories. Tesla has also made progress in industrial production of the Cybertruck and currently plans to start production at the Texas factory after the Model Y ramps up. Initial deliveries of Tesla’s electric truck Semi are scheduled to start in December 2022.
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Editor: Zhu Guanghua