Tesla earned over $3 billion in profit in the first quarter

Photo by Suzanne Cordeiro / AFP via Getty Images

In the first quarter of 2022, the company earned a $3.3 billion profit, despite supply chain constraints and production delays in China. The company announced that it turned that profit on $18.7 billion in revenue. In Q1 2021, revenue was $10.4 billion, an 81 percent increase over the previous year.

The company sold emission credit to other manufacturers at a rate of $689 million, compared to $314 million in the fourth quarter of 2011. The company sells these credits to automakers that make fewer vehicles than are required by the US government and the European Union.

In the past, the credit sales have aided the company in its car-making business. The manufacturing and energy sales business was profitable for the first time without counting emission credit sales.

It was a good quarter for the company. The company opened two new factories, one in Berlin and the other in Austin, Texas, on March 22nd and April 8th, respectively, and was forced to close its factory in Shanghai for several weeks due to rising carbon dioxide numbers. The costs of opening those two factories, as well as struggling to keep its Chinese factory in operation, were expected to weigh down the company's numbers this quarter.

The company says it started production in Berlin last month and that it started Model Y deliveries from Texas in April. The company will produce its structural battery packs with 4680 cells in Texas later this year, along with the standard packs with 2170 cells.

The earnings report followed a strong quarter for delivery and production. In the first quarter of the year, the company sent over 300,000 vehicles to its customers. Musk said that it was difficult due to global supply chain issues and the closing of the company's factory in China.

In the second quarter, the company delivered 295,324 Model 3 and Model Y vehicles, while 14,724 were for the Model S and X. The company said it built a total of over 300,000 vehicles in the past three months.

The company's gross automotive margin was 32.9 percent in Q1 2022, compared to 26.5 percent in Q1 2021. The company said in its notes to investors that it increased the average selling price of its cars and grew the number of cars it was delivering.

The global supply chain crisis was better forTesla than it was for other companies. The company was able to avoid the headaches of other global automakers by changing their software on the fly.

For reasons unrelated to its finances, it was a busy quarter for the company. The company was hit with a number of recall notices for malfunctioning features, including a pedestrian warning sound that was being obscured by loud music played over the externalBoombox speakers and an aspect of the Full Self-Driving software that allowed vehicles.

The legal drama continued this quarter. California's civil rights agency sued the company after several employees came forward with reports of discrimination. A jury awarded $137 million in damages to a black former employee of the company after he reported a hostile work environment where he heard racist epithets.

There is a surprise offer by Musk to buy Twitter for $48 billion. It's unclear how Musk's hostile takeover efforts will affect the company, but at the very least it's bad timing, given the number of important milestones that need to be hit this year.