[Auto Moto] Elon Musk expects Tesla to produce more than 1.5 million cars in 2022

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After a busy first quarter for Tesla, with record revenues and vehicle deliveries in the first quarter of 2022, Musk, CEO of Tesla, said during a conference call, "It seems likely that we will be able to produce more than 1.5 million vehicles this year." ".

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The forecast comes despite recognition that the company will face serious challenges for the rest of the year.

Musk said the record results were achieved "despite a significant chip shortage, several logistical challenges, and a difficult quarter." "We remain confident of growth in car production in 2022 versus 21. We already have a reasonable chance of a 60% increase over last year."

Supply chain challenges have kept Tesla's factories operating below capacity for several quarters, and the company doesn't see the situation improving this year.

“We plan to grow our manufacturing capacity as quickly as possible,” Tesla said, adding that it expects to achieve 50% of the average annual growth in vehicle deliveries over a multi-year horizon.

"The growth rate will depend on our equipment capacity, our operational efficiency, and the capacity and stability of the supply chain," he continued. “Our plants have been operating at less than capacity for several quarters as the supply chain becomes the main limiting factor, which is likely to continue through the remainder of 2022.”

And the challenges it faced this year certainly didn't stop Tesla from achieving a stellar quarter. Earlier this month, Tesla announced that it produced more than 305,000 vehicles and delivered more than 310,000 vehicles in the first quarter. This represents a 68% year-over-year increase in deliveries.

Revenue totaled $18.76 billion, a whopping 81% year-over-year increase. Non-GAAP earnings per share were $3.22, up 246% year over year. These numbers overshadowed market expectations.

Tesla's operating margin rose in the first quarter to 19%, putting the company on a par with supercar companies even though it sells sedans and SUVs.

However, the company is facing more than just supply chain disruptions. Transportation, employment, and other manufacturing challenges have emerged, and are likely to affect business throughout the year.

And while weekly production rates at Tesla's Shanghai plant were strong in the first quarter, a sudden surge in COVID-19 cases led to temporary plant shutdowns as well as parts of Tesla's supply chain.

Given the situation in Shanghai, Tesla confirmed on Wednesday that it has lost about a month of construction volume.

The company confirmed that limited production has recently resumed, and that it continues to closely monitor the situation. It is expected to return to the total volume of construction and delivery in the second quarter.

Auto production in the second quarter will be similar to the first, Musk said, adding that it "may be a little lower." However, production in the second half of the year should be "much higher," the CEO said.

"I've never been more optimistic or excited about Tesla's future than I am now," he said.

Musk also discussed the impact of inflation on Tesla's car prices, noting that "suppliers are under severe cost pressure," and in some cases are asking for increases of 20% to 30% for parts.

He added that given that inflation "looks likely to continue at least for the remainder of this year, which is why we have raised our rates."

He explained that the higher prices explain the fact that Tesla has had graduation applications for a year or more in some cases. "We have to expect these cost increases."

"What makes costs low, at least in the short term," Musk continued, "is that we have long-term contracts with suppliers. But those contracts will expire, and then we'll start to see potentially significant cost increases."

The CEO concluded his statements that he does not expect to raise prices further and that if the potential cost increases are not realized, the company may actually reduce prices slightly.

This article was published on the Arab Turbo website