Tesla Inc. reported better-than-expected first-quarter results, buoyed by strong demand for its electric vehicles, but warned of supply-chain challenges for the rest of the year. 

The first major U.S. automaker to report financial results for the first three months, Tesla easily beat estimates with a record profit. It cautioned that production remains constrained by shortages of key components, a common refrain for automakers due to global bottlenecks on supplies of semiconductors and other parts. 

“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 the rest of 2022,” it said in a letter to shareholders. 

But the Austin, Texas-based company posted strong gains in profit and revenue for the first three months, including the sale of regulatory credits totaling US$679 million -- more than double the previous quarter. Tesla has generated billions through credit sales that allow other automakers to comply with stricter emissions regulations.

“It’s a big number, and it speaks to where the rest of the auto industry is when it comes to selling EVs in high volumes,” said Gene Munster, managing partner of Loup Ventures. “They are still behind” Tesla, he said.

Shares of Tesla rose as much as 5.3 per cent to US$1,028.87 in after-market trading. They fell 5 per cent to US$977.20 at the close in New York.

While Tesla is still by far the world’s most-valuable auto company, with a market capitalization of US$1.01 trillion, the shares have declined 7.5 per cent this year amid concerns about global shortages of key parts. But the company has fared better than bigger-volume rivals, such as General Motors Co. and Ford Motor Co., whose shares are down 29 per cent and 23 per cent respectively.

QUARTERLY PROFIT

Profit at Elon Musk’s electric-vehicle and clean-energy company totaled US$3.22 a share, excluding some items, the Austin, Texas-based automaker said Wednesday. That beat the US$2.27 average of analysts’ estimates. Revenue rose to US$18.8 billion, compared with estimates of US$17.9 billion. 

A Covid-19 lockdown in Shanghai forced its factory to halt output, crimping production in China. “Although limited production has recently restarted, we continue to monitor the situation closely,” Tesla said.

The global EV market leader is expanding on three continents, with new factories in Austin and Berlin alongside existing plants in California and Shanghai. It delivered over 936,000 cars last year and reported deliveries of 310,048 vehicles worldwide in the first quarter. The company said it’s still projecting 50 per cent annual growth rate even as those new factories come online.

Tesla continues to add to a growing war chest: It finished the first three months with US$18 billion in cash and cash equivalents. It also continues to chip away at its debt load, carrying less than US$100 million in debt at then end of the quarter, excluding financing for its vehicle and energy products.