The EV giant beats earnings expectations with guidance for 2022. It has been working on solving the inflation issue by replacing materials and spending heavily on manufacturing. Credit sales came in surprisingly high at $679 million, a double expectation of around $312 million.
Investors were generally eyeing a decline in the first quarter compared to the prior quarter since inflation is likely to hit its bottom line. A possible explanation is that Tesla purchases its batteries materials based on long term contracts. Hence, even when raw materials prices shoot up, it does not affect its manufacturing costs immediately.
Likewise, about half of the cars shipped out during the first quarter were batteries of iron-phosphate or LFP batteries. These batteries do not contact expensive metals such as cobalt or nickel and do not inbuilt as much power in a single cell.
Guidance is vital as the company is confident of a 50% growth in vehicle production compared to last year. This helped ease concerns about production capacity due to the Covid-19 restriction on its Shanghai factory. Nonetheless, investors should be mindful of any weakness if a future production halt is more damaging than the current situation.
There is also good news which Elon Musk shared that the company is exploring a new vehicle that focuses on robotaxis as it invests heavily into self-driving technology. Pika World maintains moderate exposure to our favourite Tesla.
📱In a way of advertising for a streaming company🖥
Netflix’s woes with subscriber growth can be solved with a potential antidote of advertising which can have implications for online media companies such as Roku. CEO Reed of Netflix spoke during the earnings call on a lower-priced plan with advertisement. This idea would be a new shift in the company’s direction that has often focused on customers satisfaction at its core.
Roku stocks fell after the news does make some sense. The advertisement option will be a clear competitor to Roku Channel, a free app that has driven advertisement revenue in recent times. If Netflix can provide such a combination, especially in Asia, it will have a clear lead over Roku, which lacks a presence in the region.
If Netflix can execute the plan, it will attract the advertisement dollar from traditional television ads to the video-on-demand platform. This has helped Roku in terms of revenue per user, and it could help Netflix too.
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