“If it’s a smooth year, actually, without some big supply chain interruption or massive problem, we actually have the potential to do 2 million cars this year,” said Tesla CEO Elon Musk.
Tesla (TSLA) – Get Free Report shares surged higher in pre-market trading after the carmaker posted better-than-expected fourth quarter earnings and vowed to exceed its own forecast of a 50% annual delivery growth rate over the long term.
CEO Elon Musk also said orders for the month of January to date were “the strongest in our history” and were nearly twice the rate of Tesla’s global production, adding that without disruption, the company could deliver 2 million cars this year.
The group’s stated forecast, however, calls for a delivery target of 1.8 million, a 37% increase from last year’s levels that clashes with its 50% forecast but comes amid what Musk predicted will be a “pretty difficult recession this year.”
“There just always seems to be some freaking force majeure thing that happens somewhere on earth,” Musk told investors on a conference call late Wednesday. “And we don’t control if there’s like earthquakes, tsunamis, wars, pandemics, etc.”
“So if it’s a smooth year, actually, without some big supply chain interruption or massive problem, we actually have the potential to do 2 million cars this year,” he added. “We’re not committing to that, but I’m just saying that’s the potential.”
Tesla shares were marked 7.1% higher in pre-market trading to indicate an opening bell price of $154.72 each, a move that extends the stock’s one-month gain to around 42%.
For the December quarter, Tesla posted better-than-expected earnings of $1.19 per share on record revenues of $24.32 billion.
A range of price cuts in both the U.S. and China, however, narrowed its gross automotive profit margin to 25.9%, the lowest in two years and a big decline from the 27.9% figure recorded over the third quarter.
Musk put the margins pressures down to battery production costs, the ramp-up of factories in Berlin and Texas, higher commodity costs and price cuts.
Tesla began cutting the price of its Model 3 and Model Y vehicles in China last October, with similar reductions unveiled in the U.S. shortly after, and then deepened earlier this month after the group posted disappointing December quarter delivery figures.
Tesla slashed the price of its Model 3 and Model X sedans, along with the Model Y crossover, by between 6% and 20% for U.S. customers, pegging the Model 3 at just under $53,000.
“Price really matters for EV sales,” Musk told investors on a conference call after the company’s earnings report. “I think there’s just a vast number of people that want to buy a Tesla car but can’t afford it.”
“These price changes really make a difference for the average consumer,” he added. “Our price cuts will make a difference to the average consumer looking to buy a Tesla. Our goal is to make our cars as affordable as possible.”
Musk also touched on progress for the Tesla Cybertruck, first unveiled to great fanfare in 2019 but subject to delays ever since, indicating it wouldn’t likely reach volume production levels until next year.
“Cybertruck will not be a significant contributor to the bottom line (this year), but it will be next year. So it’s an incredible product,” Musk said. “I can’t wait to drive it personally.”