Tesla said Wednesday that its profit leapt more than sixfold last year to $5.5 billion, the highest total in its 19-year history, as sales soared further, especially in Europe and China.
But the automaker warned that supply chain troubles stemming from the pandemic would again constrain production through this year.
“Our own factories have been running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through 2022,” the company said.
Tesla’s revenue rose to $53.8 billion in 2021, from $31.5 billion a year earlier. Deliveries increased 87 percent, to 936,000 cars. It closed the year with a strong fourth quarter in which revenue climbed 65 percent, to $17.7 billion, and net income rose to $2.3 billion, from $270 million in the comparable period in 2020.
The company generated $4.6 billion in cash in the fourth quarter and ended the year with $17.5 billion in cash on hand.
Understand the Supply Chain Crisis
Elon Musk, Tesla’s chief executive, said the company would not announce any expansion of its product lineup this year so it could focus on increasing production.
Adding models while demand is outstripping supply “wouldn’t make sense,” he said in a conference call with analysts. “If we introduced new vehicles, our total output would decrease.”
Tesla said it was working on its Cybertruck pickup, which was supposed to go into production in 2021.
The company repeated a previous forecast that it expected sales to grow about 50 percent a year on average for the next few years. Mr. Musk said Tesla would grow “comfortably above” that figure in 2022.
Tesla grew last year despite a shortage of computer chips that affected the entire industry. The company was able to mitigate the impact of the shortage by switching to types of chips that were more readily available. Tesla can make such a change because its software allows its cars to work with a greater variety of chips than other automakers’ vehicles do.
“The chip shortage is still an issue,” Mr. Musk said Wednesday. “We expect to be chip-limited this year. It should alleviate next year.”
In addition to its established factories in Fremont, Calif., and Shanghai, Tesla needs output from plants it is building in Texas and Germany to maintain its rapid growth.
“We aim to increase our production as quickly as we can, not only through ramping production at new factories in Austin and Berlin, but also by maximizing output from our established factories in Fremont and Shanghai,” the company said Wednesday. “We believe competitiveness in the E.V. market will be determined by the ability to add capacity across the supply chain and ramp production.”
How the Supply Chain Crisis Unfolded
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The pandemic sparked the problem. The highly intricate and interconnected global supply chain is in upheaval. Much of the crisis can be traced to the outbreak of Covid-19, which triggered an economic slowdown, mass layoffs and a halt to production. Here’s what happened next:
A reduction in shipping. With fewer goods being made and fewer people with paychecks to spend at the start of the pandemic, manufacturers and shipping companies assumed that demand would drop sharply. But that proved to be a mistake, as demand for some items would surge.
Demand for protective gear spiked. In early 2020, the entire planet suddenly needed surgical masks and gowns. Most of these goods were made in China. As Chinese factories ramped up production, cargo vessels began delivering gear around the globe.
Then, a shipping container shortage. Shipping containers piled up in many parts of the world after they were emptied. The result was a shortage of containers in the one country that needed them the most: China, where factories would begin pumping out goods in record volumes
Demand for durable goods increased. The pandemic shifted Americans’ spending from eating out and attending events to office furniture, electronics and kitchen appliances – mostly purchased online. The spending was also encouraged by government stimulus programs.
Strained supply chains. Factory goods swiftly overwhelmed U.S. ports. Swelling orders further outstripped the availability of shipping containers, and the cost of shipping a container from Shanghai to Los Angeles skyrocketed tenfold.
Mr. Musk said Tesla would probably start scouting locations for a new vehicle plant by the end of the year.
The company said it hoped to begin shipping Model Y compacts made in Austin. Production at the plant near Berlin, which had been expected to start by the end of 2021, has been delayed because of disputes with German authorities over permits.
Tesla dominates the market for electric vehicles in the United States, but it is likely to finally face some serious competition this year. Ford Motor, General Motors, Volkswagen and Hyundai have all outlined ambitious plans to introduce new electric cars in the United States. Two fledgling electric vehicle producers, Rivian and Lucid Motors, also have just started shipping vehicles intended to compete with Tesla.
Tesla’s bottom-line figure for 2021 included nearly $1.5 billion that it earned from selling regulatory credits to other automakers, slightly less than in the previous year.