By DCB Editorial, July 21, 2022
Tesla’s Q2 performance has brought an unexpected surge in profit despite price increases and production shutdowns caused by Covid lockdowns in China. Tesla’s CEO, Elon Musk, anticipates the price rises caused by inflation will ease by the end of 2022. And it will still be possible to push for a further 50 percent growth in deliveries. During a recent investor conference call, Musk revealed that Tesla has a production problem not a lack of demand problem.
Musk also revealed the product price rises caused by inflationary pressures were reaching “embarrassing levels”. As an example, the price for the Tesla Model Y has increased by 30 percent, the long-range version now retails for $65,000. Musk also revealed that the new Gigafactories were “gigantic money furnaces”.
Nevertheless, Musk was confident that the new factories in Texas and Berlin can reach the 5,000 car per week production milestone by the end of the year. The newly constructed and operational Berlin Gigafactory is already producing 1,000 EVs per week.
Despite seeing a profit surge Tesla’s Q2 revenue actually fell to $16.93 BN from $18.76BN compared to the same time last year.
In an email sent to top Tesla executives last month, Elon Musk wrote that he had a “super bad feeling” about the state of the economy. Musk said that the company will need to cut salaried staff by 10 percent and pause all new hiring worldwide.
Musk believes that the world economy is heading toward recession, if not it is already in the early stages of one.