Tesla’s Profits Jumped in the First Quarter but Challenges Loom

Tesla said on Wednesday that it had resumed “limited production” in Shanghai after a three-week shutdown. But it warned that it continued to face “persistent” supply-chain problems as well as rising costs for raw materials.

“Our own factories have been running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through the rest of 2022,” Tesla said in a statement.

Tesla’s chief executive, Elon Musk, said on a conference call with investors and analysts on Wednesday that his “best guess” was that Tesla would produce 1.5 million cars this year, meeting the company’s goal of achieving sales growth of 50 percent a year.

Analysts are worried that supply-chain and production problems, which Tesla did a better job of avoiding last year than other automakers did, could hamper the company’s growth this year.

“A robust demand story for Tesla is being overshadowed by brutal production issues in China as well as a Rubik’s cube supply chain, which continues to haunt Tesla as well as the rest of the auto/tech industry,” analysts at Wedbush Securities said in a note to clients ahead of Tesla’s first-quarter earnings announcement.

Article source: https://www.nytimes.com/2022/04/20/business/tesla-first-quarter-earnings.html