Tesla overcomes supply chain dilemma with blockbuster deliveries in the fourth quarter Reuters

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© Reuters. File picture: On January 7, 2020, Tesla’s Model 3 car made in China appeared in the delivery activity of the Shanghai factory in China. Reuters/Aly Song

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(This January 2nd story corrects the source of Kirkhorn’s comments in the sixth paragraph at the bottom.)

Authors: Hyunjoo Jin and Nivedita Balu

(Reuters)-Tesla (NASDAQ:) reported a record quarterly delivery on Sunday, far exceeding Wall Street’s estimates, overcoming global chip shortages while increasing China’s production.

The world’s most valuable automaker achieved record deliveries for the sixth consecutive quarter.

Tesla, led by billionaire CEO Elon Musk, delivered 308,600 cars in the fourth quarter, far higher than the 263,026 cars predicted by analysts.

Tesla’s October-December deliveries increased by approximately 70% year-on-year, which was nearly 30% higher than the record deliveries in the previous quarter.

“Excellent work of Tesla’s global team!” Musk wrote on Twitter (NYSE:).

Although competition has intensified and regulatory pressure has increased after consumers filed complaints about product safety, his electric car company has increased its production in China.

Tesla ships models made in China to Europe and some Asian countries.

On an annual basis, the automaker’s deliveries in 2021 increased by 87% year-on-year to 936,172 vehicles.

Musk said in October last year that Tesla will be able to maintain an annual growth rate of more than 50% for “a considerable period of time.”

new factory

“They overcome all difficulties,” Gene Munster, managing partner of the venture capital firm Loup Ventures, said on Sunday.

“The first is the surge in demand for their products. The second is that they have done a good job meeting this demand,” he said.

Munster said that despite production headwinds and supply chain issues at the new plant, he expects Tesla’s deliveries to increase to 1.3 million vehicles this year.

Tesla’s chief financial officer, Zachary Kirkhorn, said in October that it’s difficult to predict how quickly the company’s new plants in Texas and Berlin can increase production. These plants New automotive technology and new teams will be used.

Tesla said in October that its goal is to produce the first mass-produced cars at these two plants by the end of 2021, but it is not clear whether it has reached that goal. Tesla did not respond to Reuters’ questions about these factories. Its Berlin factory was originally scheduled to start production last summer.

Deutsche Bank (DE:) said in a report on Friday that Tesla is expected to deliver nearly 1.5 million cars this year, although chip shortages are still production risks.

The shortage of “super crazy”

In 2020, due to the pandemic and blockade measures hitting demand, automakers cut orders for chips. But Kirkhorn said that Tesla has never lowered its supplier’s production forecast to support its rapid growth plan, which helped it survive the chip shortage.

Musk said that unlike most automakers, Tesla designs some chips internally, and it also reprograms the software to use scarce chips.

Musk previously stated that “2021 is a super crazy year of supply chain shortages.” He said in October that he was optimistic that these problems would pass in 2022.

Even after Tesla substantially increased US car prices this year to offset rising supply chain costs, sales remained strong.

After car rental company Hertz stated that it had ordered 100,000 cars, Tesla’s October market value exceeded $1 trillion. After Musk wrote on Twitter in November last year that he was considering selling his 10% stake in Tesla, the company’s stock price fell a bit.

Overall, Tesla’s stock price has risen by 50% last year.

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