Tesla Posts Record US$3.3 Billion Quarterly Profit
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Tesla Posts Record US$3.3 Billion Quarterly Profit

Elon Musk predicts rapid recovery in vehicle production in China to drive strong growth in total output.

By REBECCA ELLIOTT
Thu, Apr 21, 2022 1:45pmGrey Clock 4 min

Tesla Inc. posted a greater than sevenfold increase in first-quarter profit to reach a record as Chief Executive Elon Musk said the company could boost vehicle production more than expected this year despite supply-chain bottlenecks and disruptions in China.

Mr. Musk on Wednesday said Tesla likely would produce more than 1.5 million vehicles in 2022, up some 60% over last year. The company’s long-term goal is to increase vehicle deliveries by an average of 50% annually. Production in China would recover strongly, he said.

The world’s largest car company by value is recovering from a shutdown at its Shanghai factory, where work was suspended March 28 because of strict government measures meant to slow the spread of Covid-19. Tesla said it lost about a month of production from the shutdown.

“Shanghai is coming back with a vengeance,” Mr. Musk said as the company reported that sales in the first three months of the year had jumped roughly 80% from a year earlier to $18.76 billion, generating a record profit of US$3.32 billion. That topped the previous high of $2.3 billion set in the preceding quarter. Results beat Wall Street’s expectations for both sales and profit.

However, factories are likely to continue operating below capacity through 2022, due largely to supply chain bottlenecks, Tesla said.

Tesla delivered around 310,000 vehicles globally in the first quarter, up from 184,877 a year earlier and 308,650 in the fourth quarter.

Tesla shares closed down nearly 5% Wednesday, before advancing more than 4% in late trading after the company posted its quarterly results, which were buoyed by an uptick in revenue from regulatory credits.

The company sells the credits to rival auto makers that need them to comply with emissions-related rules. Such sales brought in $679 million in the most recent quarter aided by a one-time benefit, up from $518 million a year earlier. Credit sales have long been critical to Tesla’s bottom line, though they have dwindled in recent quarters. The company has said it would become less reliant on them.

Mr. Musk joined the Tesla earnings call almost a week after making a $43 billion nonbinding bid to take over Twitter Inc. The social-media company adopted a so-called poison pill a day after Mr. Musk made his offer. The move makes it harder for any investor to purchase 15% or more of the company’s stock. Mr. Musk, on the Tesla call, didn’t address the Twitter situation.

In Shanghai, Tesla had about a week’s worth of vehicle-parts inventory at its factory and was working with local authorities and suppliers to address logistics problems, local government-run Shanghai Television reported.

Shanghai-area manufacturers have had trouble getting parts delivered, because China’s travel restrictions have made it difficult for trucks to enter the region, analysts have said.

Customers, meanwhile, are having to wait longer to get behind the wheel of a new Tesla. As of March, U.S. buyers could expect to wait roughly eight months for a new long-range Model Y compact sport-utility vehicle, one of Tesla’s most popular models, according to Bernstein Research. Delivery lead times historically have been around two to eight weeks domestically, the firm said.

Tesla in recent weeks delivered its first Model Ys made at its new plants in Germany and Texas. Mr. Musk has said localizing production would improve Tesla’s economics in the long run.

The auto maker has been charging more for its cars amid inflation and persistent supply-chain bottlenecks. The cost of one configuration of the Model Y jumped 30% in the year ended in March, according to Bernstein. Price increases in China haven’t been as extreme, ranging between 5% and 11% in the same period, depending on the model, Bernstein data show.

In some cases, Mr. Musk said, suppliers are requesting 20% to 30% more for parts than they did last year. “I think the official numbers actually understate the true magnitude of inflation,” Mr. Musk said.

Tesla signaled software sales would become an increasingly important profit driver. By the end of the year, it said it expects an advanced driver-assistance feature designed to help vehicles navigate cities to be available to everyone in the U.S. who has purchased Tesla’s “Full Self-Driving” package. Tesla has been gradually releasing trial versions of the technology, which more than 100,000 people are testing, Mr. Musk said in a recent TED interview. The system, which costs $12,000 upfront, doesn’t make vehicles autonomous.

Mr. Musk on Wednesday provided additional details about the dedicated robotaxi he teased earlier this month, saying he hopes the vehicle, which won’t have a steering wheel or pedals, will enter volume production in 2024. He said a trip in such a vehicle would cost less than a bus ticket.

Tesla is working to open the company’s fast-charging network in the U.S. to electric vehicles made by other manufacturers, Senior Vice President Andrew Baglino said. The company launched a pilot program last year that allows non-Tesla drivers in parts of Europe to use its charging network.

The company also is taking steps to enable more of its customers to insure their vehicles through Tesla. It’s aiming for 80% of U.S. customers to have access to a Tesla insurance product by the end of the year, Chief Financial Officer Zachary Kirkhorn said.

The auto maker, like many in the industry, is also contending with soaring costs for the materials used in the rechargeable batteries that power electric vehicles. Raw materials account for 80% of the cost of a lithium-ion battery, up from 40% in 2015, according to Benchmark Mineral Intelligence, which tracks the battery supply chain.

Mr. Musk, who tweeted earlier this month that lithium prices had “gone to insane levels,” revisited the idea that Tesla might get into the business of mining and refining the metal and urged others to do so as well.

Tesla has flirted with that prospect for years and even neared deals in the middle of last decade to buy lithium mines in the U.S. and Argentina, according to a person familiar with the matter. But the company didn’t follow through with those acquisitions as it gave priority to production of its Model 3 sedan, the person said. In the years since, the balance of power has shifted toward suppliers as car companies from Ford Motor Co. and Volkswagen AG to newcomer Rivian Automotive Inc. scramble to secure the materials they need to meet ambitious electric-vehicle production targets. Ford and General Motors Co. are scheduled to report earnings next week. Rivian’s quarterly results are due in May.

Lithium carbonate prices averaged around $60,800 per metric ton in March, up roughly $50,000 from a year earlier, Benchmark data show.

—Raffaele Huang contributed to this article.



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Anger Does a Lot More Damage to Your Body Than You Realise

We all get mad now and then. But too much anger can cause problems.

By SUMATHI REDDY
Fri, May 24, 2024 3 min

Anger is bad for your health in more ways than you think.

Getting angry doesn’t just hurt our mental health , it’s also damaging to our hearts, brains and gastrointestinal systems, according to doctors and recent research. Of course, it’s a normal emotion that everyone feels—few of us stay serene when a driver cuts us off or a boss makes us stay late. But getting mad too often or for too long can cause problems.

There are ways to keep your anger from doing too much damage. Techniques like meditation can help, as can learning to express your anger in healthier ways.

One recent study looked at anger’s effects on the heart. It found that anger can raise the risk of heart attacks because it impairs the functioning of blood vessels, according to a May study in the Journal of the American Heart Association .

Researchers examined the impact of three different emotions on the heart: anger, anxiety and sadness. One participant group did a task that made them angry, another did a task that made them anxious, while a third did an exercise designed to induce sadness.

The scientists then tested the functioning of the blood vessels in each participant, using a blood pressure cuff to squeeze and release the blood flow in the arm. Those in the angry group had worse blood flow than those in the others; their blood vessels didn’t dilate as much.

“We speculate over time if you’re getting these chronic insults to your arteries because you get angry a lot, that will leave you at risk for having heart disease ,” says Dr. Daichi Shimbo, a professor of medicine at Columbia University and lead author of the study.

Your gastrointestinal system

Doctors are also gaining a better understanding of how anger affects your GI system.

When someone becomes angry, the body produces numerous proteins and hormones that increase inflammation in the body. Chronic inflammation can raise your risk of many diseases.

The body’s sympathetic nervous system—or “fight or flight” system—is also activated, which shunts blood away from the gut to major muscles, says Stephen Lupe, director of behavioural medicine at the Cleveland Clinic’s department of gastroenterology, hepatology and nutrition. This slows down movement in the GI tract, which can lead to problems like constipation.

In addition, the space in between cells in the lining of the intestines opens up, which allows more food and waste to go in those gaps, creating more inflammation that can fuel symptoms such as stomach pain, bloating or constipation.

Your brain

Anger can harm our cognitive functioning, says Joyce Tam, an assistant professor of psychiatry and behavioral sciences at Rush University Medical Center in Chicago. It involves the nerve cells in the prefrontal cortex, the front area of our brain that can affect attention, cognitive control and our ability to regulate emotions.

Anger can trigger the body to release stress hormones into the bloodstream. High levels of stress hormones can damage nerve cells in the brain’s prefrontal cortex and the hippocampus, says Tam.

Damage in the prefrontal cortex can affect decision-making, attention and executive function, she adds.

The hippocampus, meanwhile, is the main part of the brain used in memory. So when neurons are damaged, that can disrupt the ability to learn and retain information, says Tam.

What you can do about it

First, figure out if you’re angry too much or too often. There’s no hard and fast rule. But you may have cause for concern if you’re angry for more days than not, or for large portions of the day, says Antonia Seligowski, an assistant professor of psychiatry at Massachusetts General Hospital and Harvard Medical School, who studies the brain-heart connection.

Getting mad briefly is different than experiencing chronic anger, she says.

“If you have an angry conversation every now and again or you get upset every now and again, that’s within the normal human experience,” she says. “When a negative emotion is prolonged, when you’re really having a lot more of it and maybe more intensely, that’s where it’s bad for your health.”

Try mental-health exercises. Her group is looking at whether mental-health treatments, like certain types of talk therapy or breathing exercises, may also be able to improve some of the physical problems caused by anger.

Other doctors recommend anger-management strategies. Hypnosis, meditation and mindfulness can help, says the Cleveland Clinic’s Lupe. So too can changing the way you respond to anger.

Slow down your reactions. Try to notice how you feel and slow down your response, and then learn to express it. You also want to make sure you’re not suppressing the feeling, as that can backfire and exacerbate the emotion.

Instead of yelling at a family member when you’re angry or slamming something down, say, “I am angry because X, Y and Z, and therefore I don’t feel like eating with you or I need a hug or support,” suggests Lupe.

“Slow the process down,” he says.

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