Tesla confirms surprise quarterly profits amid China struggles

In spite of the brand’s ongoing production difficulties in COVID-19-affected China, Tesla continues to notch financial wins.

The American electric vehicle brand has released a financial update concerning the second quarter of 2022, underlining an adjusted profit of US$2.27 per share and stating that it’s poised for a “record breaking” second half of the year.

The brand’s profit per share eclipsed the consensus estimate of US$1.81 for the quarter; pundit confidence seemingly low due to the ongoing lockdown concerns in China, claims from Tesla CEO Elon Musk that new factories were losing the company money, inflation, and layoffs.

The EV marque reports that it’s also managed to convert approximately 75% of its bitcoin into fiat currency, stating that the swaps have added US$938m to its balance sheet.

Fears around the brand’s Chinese output were also quelled, with Tesla reporting record production figures from the Shanghai plant. This will be of limited comfort to New Zealanders waiting on Chinese-built Teslas, of which a bulk delivery shipment hasn’t landed for several months.

There is speculation that Shanghai could be forced back into mass lockdown conditions following a surge in case numbers. The city rolled out new mass testing protocols earlier this month. Lockdowns would hamper Tesla’s ability to keep its momentum going.

In response to rising costs caused by inflation, Tesla rolled out several price hikes on its vehicles in Q2. Musk has said that these hikes could prove to be temporary if inflation plateaus.

“Tesla’s solid quarter is the latest sign that it has done an outstanding job navigating through global supply chain and logistics challenges, weathering the storm better than most legacy automakers,” senior analyst at Investing.com’s Jesse Cohen told Reuters.

“Tesla’s improved manufacturing efficiency places it in a good position to produce more cars, putting it on track to break its deliveries target for the year.”