Tesla beats Q4 estimates but expects supply chain challenges

Yahoo Finance's Julie Hyman and Brian Sozzi discuss Tesla earnings and the outlook for the electric vehicle company with supply chain issues.

Video transcript

- We got to talk about Tesla as well this morning. The shares are higher now by 9/10 of 1%. And this has been an interesting turnaround, Sozz, because when I came this morning, the shares were down, and down relatively sharply here. A lot going on in this Tesla report that we have to highlight. First of all, the company did have record profit last year. That's something to mention. $5 and 1/2 billion after only its second full year of profitability, add another year of profitability, and a big one.

But-- and this is a big but-- they're not coming out with any new models this year. That's really the thing I think that is the big takeaway from this report. Even though Tesla by many accounts has sort of navigated the supply chain challenges, in particular chip challenges, better than competitors, it's still being affected.

And it says that's one of the reasons that it's not going to come out with new models. No Cybertruck this year. They might be-- they fast tracked this humanoid robot. I don't know how much credence to give the thing. I don't think that's what investors are trading on, certainly. But it is interesting to see the stock higher, Sozz.

- Julie, you know me. I could spend about 20 minutes talking about this Tesla robot, how it may or may not change life as we know it. But look, I thought we would be seeing a greater response to Tesla's earnings here. By and large, a very impressive quarter and year for Tesla. Also, we had Elon Musk on that earnings call last night.

And now keep in mind, he told us last year that he wasn't going to be on every single earnings call. But he was on there yesterday, gave a typical Elon Musk type of earnings call. But there is probably some concern, Julie, on growth. Elon called out 50% growth this year. That would be a slowing growth rate compared to what Tesla put up last year.

And number two, you did get the sense that they're about to invest a lot more aggressively, to add even more capacity. Of course, they're looking to increase capacity out of Austin, out of their new plants in Berlin. But I think Musk did tease a new round of potential sites to help just meet the demand it's seeing on its platform. And when he teases something like that, it could potentially be more cost that the market has it baked into Tesla shares.

- Exactly. And so the number we have to keep an eye on there is one that you highlighted in our morning meeting. Automotive gross margin. It was 29.3% last year from 25.6% in 2020. So it's been expanding. But that's the number that we and investors have got to watch if indeed the company's costs are going higher.

- This has been a big week, Julie, for electric vehicles. There is an arms race amongst automakers just to catch up to Tesla by adding new capacity. GM started the week saying they're going to invest $7 billion more to increase electric vehicle capacity.

We got to talk to Ford CEO Jim Farley. And one of my takeaways from our chat is that he's looking at his next round of potential investments on top of, I believe, $11.4 billion he's already investing in new battery plants. They're all trying to catch up to Tesla. And this doesn't even go into what Volkswagen is doing, what Toyota is doing. So it's been a very, very fascinating week here for the EV industry.

- It has. And we're going to talk much more about Tesla, by the way, in a little bit with an analyst.

- And robots.

- Yeah.