Tesla Overcomes Supply Chain Problems With Successful Fourth Quarter Deliveries

A Tesla Model 3 car is seen in their showroom in Singapore on October 22, 2021. Photo taken on October 22, 2021. REUTERS / Edgar Su

Jan. 2 (Reuters) – Tesla Inc (TSLA.O) on Sunday reported record quarterly deliveries that far exceeded Wall Street estimates, overcoming global chip shortages as it ramped up production in China.

It was the sixth consecutive quarter that the world’s most valuable automaker posted record deliveries.

Tesla, led by billionaire CEO Elon Musk, delivered 308,600 vehicles in the fourth quarter, far more than analysts’ forecast of 263,026 vehicles.

Tesla’s October-December deliveries were up about 70% from the previous year and nearly 30% above record deliveries in the previous quarter.

“Great job from the Tesla team around the world! Musk wrote on Twitter.

Its electric car maker has increased production in China even as competition has intensified and regulatory pressure has increased following consumer complaints about product safety.

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

On an annual basis, the automaker increased its deliveries by 87% from the previous year to reach 936,172 vehicles in 2021.

Musk said in October last year that Tesla would be able to maintain an annual growth rate of over 50% for “quite a while.”

NEW FACTORIES

“They beat the odds,” Gene Munster, managing partner of venture capital firm Loup Ventures, said on Sunday.

“The first is that the demand for their products is exploding. And the second is that they are doing a great job of meeting that demand,” he said.

Munster said he expected Tesla deliveries to hit 1.3 million vehicles this year despite production headwinds at its new factories and supply chain issues.

Tesla CFO Zachary Kirkhorn said in October that it was difficult to predict how quickly the company will be able to scale up production at new factories in Texas and Berlin, which will use new technology from vehicles and new teams.

Tesla said in October that it aimed to build its first production cars at both factories by the end of 2021, but it is not known whether it has met that target. Tesla did not respond to a Reuters question about the factories. Its Berlin plant was initially scheduled to start production last summer.

Deutsche Bank said in a report on Friday that it expected Tesla to make nearly 1.5 million vehicle deliveries this year, although chip shortages remain a production risk.

“SUPER CRAZY” SHORTAGES

In 2020, automakers cut back on chip orders as the pandemic and lockdowns hit demand. But Tesla has never cut its production forecast with suppliers to support its plan for rapid growth, which has helped it overcome the chip shortage, Musk said.

Tesla, which designs some chips in-house unlike most automakers, also reprogrammed the software to use less rare chips, according to Musk.

Musk, who previously said: “2021 has been the year of extremely insane supply chain shortages,” said in October that he was optimistic that these issues would be resolved in 2022.

The strong sales came even after Tesla sharply increased vehicle prices in the United States this year to offset rising supply chain costs.

Tesla hit more than $ 1,000 billion in market capitalization in October after car rental company Hertz said it ordered 100,000 of its vehicles. Shares of the company lost ground after Musk wrote on Twitter in November that he was considering selling 10% of his stake in Tesla. Read more

Overall, Tesla shares gained 50% last year.

Reporting by Hyunjoo Jin in San Francisco, Nivedita Balu and Sneha Bhowmik in Bengaluru; Editing by Daniel Wallis and Mark Porter

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