Elon Musk Says Tesla Will Give Priority to Deliveries Over New Vehicles in 2022


Elon Musk


Tesla Inc.

TSLA 2.07%

won’t introduce new vehicles this year, as the electric-vehicle maker bets on increasing deliveries over diversifying its product offerings in the face of ongoing supply-chain disruptions.

Introducing new vehicles now would dent Tesla’s ability to grow output, Mr. Musk said Wednesday as the company posted record earnings.


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“The fundamental focus of Tesla this year is scaling output,” Mr. Musk said, noting that he expects the company to comfortably boost output by more than 50% this year.

It has been nearly two years since Tesla last delivered a new model—the Model Y compact sport-utility vehicle—to customers. Meanwhile, auto makers are expected to launch more than two dozen new battery-powered vehicles in the U.S. this year, according to Bank of America.

A rapid increase in vehicle deliveries helped Tesla generate record profit in 2021. Tesla reported a $5.5 billion annual profit on $53.8 billion of sales last year, after increasing vehicle deliveries 87% from 2020. That is up from $721 million in profit and $31.5 billion in sales in 2020, when Tesla generated its first full-year profit, and ahead of Wall Street’s expectations.

Mr. Musk’s electric-vehicle maker leveraged in-house software engineering expertise to navigate the global computer-chip shortage last year, helping it to increase vehicle deliveries at its fastest pace in years. It also benefited, like many auto makers, from surging car prices as demand outran supply.

Yet it hasn’t been immune to supply-chain problems, which, paired with transportation, labor and other challenges, caused Tesla to run factories below capacity, the company said.

The company’s automotive gross margin, a measure of its cost efficiency, rose to 29.3% last year, from 25.6% in 2020, even though Tesla said rising raw-materials prices and higher logistics costs dented profit, as did increased costs related to vehicle recalls.

The global shortage of semiconductors that has hit the auto industry hard is expected to persist through the year, though ease somewhat, Mr. Musk said.

The company’s shares closed up around 2% Wednesday in regular trading and were fluctuating between losses and gains in post-market trading after Tesla released its results.

Last year, billionaire CEO Elon Musk reached several milestones across Tesla, SpaceX and Starlink. WSJ reporters Rebecca Elliott and Micah Maidenberg break down some of his biggest moments in 2021 and what’s to come in 2022. Illustration: Tom Grillo

Among the new vehicles on Tesla’s plate are the “Cybertruck” pickup, unveiled in 2019, and the semitrailer truck, which Tesla revealed in 2017. Mr. Musk said the company wasn’t currently working on the $25,000 car he had previously teased, aimed at making electric vehicles accessible to a wider array of customers.

Analysts expect Tesla to build on last year’s momentum by delivering nearly 1.5 million vehicles to customers in 2022, according to FactSet. That is consistent with the company’s target of increasing deliveries by 50% annually, on average, in the coming years. Tesla said that, as of the fourth quarter, it was producing at an annualized rate of more than 1.22 million vehicles.

Key to those growth plans are new factories in Germany and in Texas. The company has faced delays at both facilities, which it had hoped to have operational last year. Analysts now expect Tesla, which said it had started building Model Ys in Texas, to begin delivering vehicles made at the plants in the next few months.

In Germany, the Brandenburg state government says the approval process for Tesla’s factory near Berlin is in the final stages after the company, in December, provided the last batch of requested documents.

Tesla has received temporary approval at each step of the construction process and has been producing vehicles in small numbers to test machines at the plant, but it isn’t allowed to sell any vehicles made there or shift into mass production, state officials said.

The car maker said it was also looking to expand capacity at its Fremont, Calif., plant.

Mr. Musk said Tesla would scout new factory locations this year and likely be in a position to announce selections toward the end of the year.

Tesla, which has long relied on battery cells from suppliers such as

Panasonic Corp.

, has also been working to produce new, larger cells that it designed in-house.

Meanwhile, the company has been broadening access to an advanced driver-assistance feature designed to help vehicles navigate cities. Tesla said nearly 60,000 vehicles in the U.S. now have access to the city-driving tool, which is part of a package that Tesla has dubbed “Full Self-Driving,” though it doesn’t make vehicles autonomous. Tesla recently increased the price of that package 20%, to $12,000.

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Write to Rebecca Elliott at rebecca.elliott@wsj.com

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