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Author: Alan LittleDate: 2022-01-28

Tesla (TSLA) shares down 11.5% on production capacity warning

Tesla (TSLA) posted Q4 beats on Thursday, but its shares fell 11.5% after it said that its factories would struggle to hit full capacity due to supply chain disruptions.

 

Tesla (TSLA) shares slumped 11.55% on Thursday despite a blowout Q4 report after the electric carmaker said that it would struggle to run its factories at “full capacity” in the near term due to a combination of problems.

 

The raw numbers for the three months to 31st December were impressive as Tesla’s revenue soared 65% to a record $17.72bn, while adjusted earnings rose to $2.54 per share to trump the $2.34 Wall Street consensus.

 

However, supply chain disruptions appear to have finally caught up with the company after it cautioned that production capacity would be hit in Q1.

 

That admission took the shine off its Q4 beats, even though CEO Elon Musk offered a positive longer-term forecast, with annual sales set to jump by 50% this year compared to 2021 levels.

 

Commenting on the news, Oppenheimer analyst Colin Rusch said that Tesla’s ability to procure chips will be a “swing factor” in its ability to boost production.

 

He added: “Along with continued elevated freight costs, ramp inefficiencies are expected to be gross margin headwinds in 2022.”

 

Tesla recently opened new factories in Texas and Berlin, but it could take time for it to manufacture vehicles at the same pace as its Freemont and Shanghai ‘gigas’.

 

During the final three months of the year, Tesla managed to shift 308,600 units, which was another quarterly record and meant that just over 936,000 were delivered during the full year.

 

All the vehicles shipped in 2022 will be current models after Tesla confirmed that it will not add new ones to its fleet and that the cybertruck will not go on sale until next year.

 

TSLA traded down after the report on Thursday, falling 11.55% to $8293.10.

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