Shares in Tesla Inc. surged in late trading today after the electric car and solar panel maker reported a strong beat in its latest earnings report.

For the quarter that ended Dec. 30, Tesla reported earnings of $1.19 per share, on revenue of $24.32 billion, up 37% year-over-year. Analysts had expected earnings of $1.13 a share on revenue of $24.16 billion.

Automotive revenue rose 33% from a year ago, to $21.3 billion, while operating expenses fell 16%, to $1.876 billion. Adjusted net income came in at $4.1 billion, up $400 million over the previous quarter and $1.3 billion over the fourth quarter of 2021.

Overall gross margin was 23.8%, with automotive coming in at 25.9%. Operating cash flow was $14.7 billion over the whole year, with free cash flow of $7.62 billion. Deliveries in 2022 totaled 1.31 million, a new record for Tesla.

With surging demands comes surging supply and every Tesla factory produced record numbers of vehicles during the year. Tesla’s latest factory in Berlin produced 3,000 vehicles a week toward the end of 2022 as it gears up to produce about 250,000 Model Y vehicles in 2023.

On the solar side of the business, Tesla deployed 348 megawatts of panels, up 1% year-over-year. The company’s solar battery storage business surged, up 64% year-over-year, to 6,541 megawatt-hours.

“As we progress into 2023, we know that there are questions about the near-term impact of an uncertain macroeconomic environment and in particular rising interest rates,” Tesla said in its deck for investors. “In the near term, we are accelerating our cost reduction roadmap and driving towards high production rates while staying focused on executing against the next phase of our roadmap.”

For its outlook, Tesla predicts that it will keep its long-term delivery target of 50% compound annual growth rate by delivering 1.8 million cars. The company declined to give solid figures for the quarter and year ahead, instead saying that “we expect our hardware-related profits to be accompanied with an acceleration of software-related profits.”

Also mentioned in the outlook is Cybertruck, Tesla’s version of a pickup truck, which is said to remain on track to begin production later this year at Tesla’s factory in Texas.

In an investor call after the earnings release, Chief Executive Officer Elon Musk said that in January, Tesla saw the strongest orders in its history and that orders are currently coming in at twice the rate of production.

When asked why Tesla is predicting it will make only 1.8 million vehicles this year, Musk was colorful in his response. “We’re saying 1.8 because there always seems to be some friggin’ force majeure thing that happens somewhere on Earth,” Musk said. “We don’t control if there’s earthquakes, tsunamis, wars, pandemics, et cetera. If it’s a smooth year, without some big supply chain interruption or massive problem, we have the potential to do 2 million cars this year. I think there would be demand for that, too.”

Investors liked the numbers, with Tesla shares up more than 5% in late trading. However, the company is still a long way off highs of $381 per share as recently as April last year.

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