Tesla returned to record quarterly profits on Wednesday (25), confirming its long-term growth prospects, despite concerns about increased competition and macroeconomic difficulties.
Elon Musk’s electric vehicle company posted profits of $3.7 billion in the fourth quarter, up 59% from the same period a year earlier.
Meanwhile, revenue increased 37% to $24.3 billion.
Results were driven by a 31% increase in vehicle deliveries compared to the prior year period.
The electric vehicle giant, which surprised investors earlier this month by announcing vehicle price cuts in the United States and Europe, acknowledged challenges such as rising interest rates and an “uncertain macroeconomic environment”.
Tesla said it was accelerating its “cost reduction plan” as it worked to increase production.
“In either scenario, we are prepared for near-term uncertainty,” Tesla said, adding that its “relentless cost control and cost innovation” will allow it to navigate 2023 better than its rivals.
Recent price cuts in the US and Europe – which followed similar moves last year in China – have sparked debate among analysts over whether they are a sign of weakness or a canny tactic to increase market share.
Musk praised the move on a conference call on Wednesday, noting that Tesla has seen a surge in orders since the vehicle price cuts were announced.
“Price really matters,” said the billionaire. “These price changes really make a difference to the average consumer.”
The company has described its long-term plan as aiming for production growth of 50% per year on average.
Tesla’s earnings report on Wednesday reaffirmed that long-term forecast, although it said it would likely produce just 1.8 million vehicles in 2023, about 31% above 2022 production.
The company also predicted a 37% growth in deliveries, to 1.3 million.
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