Price hikes to offset increased costs within Tesla’s supply chain have helped the company jump in profits and Elon Musk to $23bn (£17.6bn) from rewards.
The electric vehicle founder and CEO, who is currently facing an audacious $43 billion bid on twitter and takes no Tesla salary, is already the richest person in the world from afar.
Last night he was deemed qualified for payment after the company met its performance targets in the first quarter of the year.
Those targets include Tesla’s share price and financial performance, the latter of which ignored global supply chain disruptions and production cuts in China, both related to the COVID-19 pandemic.
Tesla, which also includes a solar panel division, reported January-March revenue of $18.8 billion, boosted by multiple price hikes intended to offset rising costs for lithium, nickel, cobalt and other raw materials.
It took Tesla’s pretax profit per vehicle delivered to exceed $16,000, an increase of more than 60% over the same period last year.
Net profit is more than $3.3 billion.
The shares — down more than 7% this year after a meteoric rise over the past 18 months that made Tesla the world’s most valuable automaker — rose more than 5% in after-hours trading of work.
However, analysts have warned that it may be more difficult for Tesla to post similar numbers later this year as its costs rise further.
The company is upgrading new factories in Germany and Texas at a time when Russia’s invasion of Ukraine is further driving up raw material costs and squeezing consumer incomes from runaway inflation.
It also faces more competition.
Musk said on a conference call with analysts that Tesla’s waiting lists remain long, but he couldn’t rule out further list price hikes, saying, “We hope we don’t need raise prices further.
Despite production and supply chain issues in China, Tesla reiterated its forecast of 50% average annual growth in vehicle deliveries over the next few years.
Musk admitted that lithium, used in battery production, was responsible for the bulk of cost increases to date and “a limiting factor” in the growth of electric vehicles.
He encouraged companies to get into the lithium business, which he said would generate high margins thanks to high prices.
“Lithium margins right now are practically software margins… Do you like minting money? Well, the lithium business
is for you,” he said.