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Musk: Tesla's doing great. I mean, have you seen my Twitter follower count?

Elon conflates 'popularity' on unrelated platform with successful year for EV maker

Never mind the headlines. 2022 was Tesla's best year ever, Elon Musk claimed in the automaker's Q4 2022 earnings call this week.

According to Tesla [PDF], the electric car maker brought in $24.32 billion in revenue in the final three months of 2022 – a 37 percent year-over-year increase. Earnings per share were also up 40 percent year-over-year to $1.19, and both figures beat Wall Street's expectations. Profit from the quarter amounted to $3.7 billion, up 59 percent.

As for the full year, Musk highlighted during the conference call with analysts that his manufacturer generated $12.5 billion in net income, up 128 percent on 2021, and $7.5 billion in free cash flow during the period. Sales for the year amounted to $81.5 billion, up 51 percent.

"It's worth noting that all these records were in the face of massive difficulties," Musk said.

Scratch the surface, and the picture changes a bit. That aforementioned revenue in Q4 came with a decrease in gross profit margin, while Tesla's overall share of profits from automotive sales slipped as well.

EBITDA margins also decreased in Q4, and while overall free cash flow improved in 2022, Q4 was a different story: year over year, Q4 saw net cash from operating activities decrease by 29 percent, while free cash flow shrunk by nearly half.

Tesla's stock price was still up slightly on this news, and has been up 45 percent in the first 26 days of 2023. Still, a one-year look back at Tesla's stock price shows its value has halved since January 2022.

Musk and co. also said during the meeting they planned to cut costs to keep the biz profitable, and are even banking on a recession to bring expenses down.

"If the recession is a serious one and I think it probably will be, but I hope it isn't, that would lead to meaningful decreases in almost all of our input costs," Musk said.

Tesla is popular because I am popular

We note that Tesla missed its growth objectives for 2022 and delivered fewer vehicles than analysts expected, though deliveries were still up year-over-year, as was production. The automaker slashed sticker prices around the globe a few weeks ago. Price cuts were also necessary to conform to new electric vehicle incentives.

"The most common question we've been getting from investors is about demand… so I want to put that concern to rest," Musk said during the call.

He claimed Tesla's year-to-date orders have been the strongest in the automaker's history and are outselling the rate of production by almost double. That would be a turnaround from the end of 2022, when Tesla reported producing 439,701 cars and delivering 405,278 of them.

"Demand far exceeds production, and we actually are making some small price increases as a result," Musk said. 

When asked if his purchase of Twitter and its accompanying litany of PR disasters was negatively affecting Tesla's brand image, Musk's response appeared to conflate his personal popularity on Twitter with a positive perception of the Tesla brand.

"Let me check my Twitter account. OK, so I've got 127 million followers. It continues to grow very rapidly. That suggests that I'm reasonably popular," Musk said, "so I think Twitter is actually an incredibly powerful tool for driving demand for Tesla."

That suggests that I'm reasonably popular

Follower counts, of course, don't indicate whether someone approves of the individual they're following or are doing so with a critical eye. It also doesn't account for followers who might not even be human.

Musk managed to squeeze a pitch to advertisers into his defense of Twitter, too: "I would really encourage companies out there… to make more use of Twitter," the Tesla, SpaceX and Twitter CEO said. "It will help them drive sales just as it has with Tesla," Musk added. That's amid reports that advertising sales has cratered at Twitter.

Temper your Cybertruck expectations better than its windows

Musk alluded to some new Tesla models being unveiled in March at the company's annual shareholder meeting, but existing vehicles that have yet to reach production – like the Cybertruck – are another story. 

When asked if the Cybertruck would enter production in the middle of 2023, Musk said it would begin "maybe sometime this summer."

He noted that the start of production is a slow process, "so I wouldn't put too much stock in start of production. It's kind of when does volume production actually happen, and that's next year."

Andrew Baglino, Tesla's SVP of powertrain and energy engineering, said installation of Cybertruck production equipment had recently begun at the automaker's gigafactory in Austin, Texas, and production wouldn't ramp up until 2024.

Tesla also announced this week it was planning a $3.6 billion expansion of its Nevada gigafactory to add battery production capacity and a dedicated production facility for the Tesla Semi. 

Consumer Reports also released details of its test of 12 active driver assist systems this week, which found Tesla's Autopilot was falling behind innovations from Ford, GM and other established automakers as concerns over the safety of Tesla's tech continue to grow.

Musk said during the call that an update to Autopilot was recently released to add full self-driving support on city streets, and the system was showing clear safety improvements.

"We would not have released the FSD Beta if the safety statistics were not excellent," Musk claimed. ®

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