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Tesla Woes Improving

The EV automaker appears positioned for another growth phase as long as the global economy stays strong, analysts say.  

July 21, 2022
Tesla Woes Improving

Tesla Founder and CEO Elon Musk

Credit:

Wikipedia

2 min to read


 

Tesla’s pause to expansion plans in the second quarter may bring down earnings, but the automaker’s factory troubles in China, Texas and Berlin appear to be improving. 

Now the EV automaker appears positioned for another growth phase as long as the global economy stays strong, analysts say.  

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"Despite all the drama and the ups and downs with Mr. Musk, it's worth sticking with it," George Gianarikas, analyst at Canaccord Genuity, said in an interview with CNBC last week. The analyst called Tesla "Apple on steroids" because of the automaker's lead in the electric vehicle race.

Tesla is expected to show a rise in quarterly revenue with its reporting on July 20, according to Reuters. Analysts expect the automaker to report revenue of $17.09 billion for the quarter, a 43% increase from $11.96 billion in 2021.

In June, Musk noted the newly opened auto plants in Berlin and Austin were losing billions of dollars as they ramped up production. But as production picks up, and the automaker's China plant expands, Tesla could post increased revenue in the second half of the year.   

The company reported in early July that its global deliveries fell 18% to 254,695 in the second quarter after two years of gains. But the automaker compared that downturn with the first quarter, not to the quarter a year-earlier. In a year-on-year comparison, Tesla's sales rose 27%.

Tesla called June 2022 “the highest vehicle production month in Tesla history” in a press release, indicating China was back online and production had increased in Texas and Berlin.

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Tesla said in the press release that June 2022 "was the highest vehicle production month in Tesla's history" — an indication that China was fully back online, and Texas and Berlin were seeing higher volume production.

Still, investors and financial analysts would like to know where the company stands on a few key issues:

AI. Tesla Director of Artificial Intelligence (AI), Andrej Karpathy, has announced plans to leave the company. The company is counting on AI capabilities to make its vehicles fully autonomous.

Layoffs. Tesla has laid off hundreds of workers after CEO Elon Musk warned of an economic downturn in June. The company also has permanently closed its San Mateo, Calif., office and laid off its 229 workers.

Lawsuit. Workers have filed a lawsuit over layoffs at the company's Nevada battery factory.

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Battery Factry. Panasonic, a partner with Tesla in the Giga Nevada battery plant, has announced it will build a battery factory in Kansas to meet growing battery demand.

Products: Investors seek product updates, on the Cybertruck, which is expected sometime next year, the company’s new humanoid robot, Optimus, and dedicated autonomous taxis without driver controls.

Originally posted on Auto Dealer Today

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