Tesla stocks skyrocketed on Thursday beating forecasts after the electric car company showed record profits during its first quarter of 2022. Musk’s company announced that it earned $3.7 billion in revenue. As a result, Tesla’s stocks have risen more than 6% in one day. The Tesla stock rise has defied the expectations of financial experts and analysts, who forecasted a $2.6 billion revenue for the quarter.
This quarter’s revenue is a new record for Tesla, whose previous profit record was $2.9 billion in the last quarter of 2021. The revenue of Q1 2022 is also more than triple what Tesla reported one year ago. The record profit reports show that the company has managed to weather the ongoing global supply chain issues that are affecting companies around the world.
Tesla stocks rise despite supply chains issues in China
Forecasters and analysts were concerned that the ongoing brutal lockdown in Shanghai and the ripple effects it might have on the global economy. Of special concern was the three-week shutdown of Tesla’s Shanghai factory, one of the biggest production centers of the company, which produced almost half of the 310,000 electrical vehicles made in China in 2021. However, the Q1 report of 2022 shows that the global supply chain issues and the Shanghai shutdown have not had an effect on Tesla.
Tesla’s Shanghai factory was reopened this week, with media outlets reporting that employees will eat and sleep in the factory to prevent a future COVID-19 lockdown. It has also been reported that Tesla will increase the workload of its factory workers in Shanghai, going from an 8-hour/four-day week to 12 hours/six-day week to ramp up production. Companies in China often have living spaces for their workers in their factories, but since Tesla’s Shanghai company does not have any, the company will give employees sleeping bags while they set up spaces for showering, food, and entertainment.
Musk said in a conference call with investors that “Tesla Shanghai… is coming back with a vengeance” and that he thinks the company “will see record output per week from Shanghai this quarter.” China has become a major center of production and sales for Tesla, as the company not only produces a substantial amount of its cars in the Shanghai factory but also reported a record 302% increase in the sales of Model Y cars in China over the last year.
The Tesla stock rise is good news for Musk’s Twitter bid
The good news for Tesla comes at a time when its founder is locked in a hostile takeover of Twitter. The eccentric South African billionaire became the biggest shareholder of Twitter a couple of weeks ago and then made a $43 billion offer to buy all of Twitter’s shares, which triggered an ongoing fight between Musk, the Board, and other major shareholders on Twitter over the future of the influential social media platform.
The Board has, at least for now, opposed Musk’s attempts to buy the company, adopting a “poison pill” tactic that would allow other shareholders to buy more shares of the company at a discounted price, making it more difficult and expensive for Musk to buy the company. The South African has countered this move by announcing on Thursday that it has secured $46.5 billion in funding for his bid to take over Twitter.
Daniel is a Political Science and Economics student from the University of South Florida. He worked as a congressional intern to Rep. Gus Bilirakis (FL-12) from January to May 2020. He also is the head of international analysis at Politiks // Daniel es un estudiante de Cs Políticas y Economía en la Universidad del Sur de la Florida. Trabajo como pasante legislativo para el Representate Gus Bilirakis (FL-12) desde enero hasta mayo del 2020. Daniel también es el jefe de análisis internacional de Politiks.