Elon Musk is optimistic about the end of “hell” in the supply chain

Tesla Inc. has been through “supply chain hell”but Elon Musk believe that the manufacturer of electric cars It has possibilities to get ahead in the second half of the year.

The chief executive tempered his optimism as he spoke of Tesla’s better-than-expected earnings, emphasizing how difficult it has been to get parts and materials. Tesla sold about 75% of its bitcoin holdings due to concerns on the company’s liquidity last quarter, when its Shanghai plant closed for weeks.

“We have the potential for a unprecedented second half Musk said Wednesday in a call with analysts. “The last few years have seen quite a few force majeure cases, and it’s been kind of a supply chain hell for a number of years.”

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Tesla shares have fallen 30% this year.

The first major US automaker to report second-quarter results said in a letter to shareholders that ramping up production at its two newest plants, in Germany and Texas, will take time and that supply problems will have to be overcome. Musk, 51, said that while the larger battery cells Tesla has been trying to make won’t be a big factor this year, the company has enough cells from previous generations to meet its needs.

Tesla left unchanged its plan to increase vehicle deliveries by 50% per year on average for several years. It will have to pick up the pace to hit that mark in the second half, as snags ranging from supply and labor shortages to logistical problems prevented its factories from running at full capacity in the first half of the year.

“They will maintain their 50% growth rate, which is a bit surprising. I thought they might retract that,” said Gene Munster of Loup Ventures. “They are managing to overcome the difficulties well.”

tesla registered adjusted earnings of $2.27 per share, beating estimates of $1.83 per share from analysts surveyed by Bloomberg. The figure is down from the $3.22 a share Tesla earned in the first quarter, marking the first sequential earnings decline since the end of 2020.

Tesla worldwide sales

Tesla previously said that delivered 254,695 vehicles worldwide in the quarter, up 27% from a year ago, but down from its first-quarter record of 310,048. It is the first time in two years that the company has failed to increase its vehicle deliveries from one quarter to the next.

In April, Musk projected that the company would produce more than 1.5 million of vehicles this year. In the first half, Tesla produced around 564,000.

Tesla’s total revenue rose 42% from a year earlier to $16.9 billion, meeting analysts’ median estimate.

Meanwhile, Musk said that Tesla is open to increasing its cryptocurrency holdings even after reporting a bitcoin deterioration that reduced second-quarter earnings. The sale of most of Tesla’s digital assets should not be considered “a verdict on bitcoin,” he noted.

LM

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Elon Musk is optimistic about the end of “hell” in the supply chain