Tesla delivered a record number of vehicles in the first quarter of 2022 while also posting higher-than-ever profits.

The electric car manufacturer produced 305,407 vehicles in Q1 2022 and delivered 310,048 vehicles out of which, 295,324 were Model 3s and Model Ys while the remaining 14,724 were for Model S and Model X cars. That’s compared to 184,877 vehicles delivered in Q1 2021 and 308,650 in the previous quarter (Q4 2021).

On the back of rising sales that generated no less than $18.76 billion, Tesla posted a first-quarter profit of $3.32 billion, significantly more than the $2.3 billion profit it recorded in the previous quarter and higher than Wall Street’s expectations. Tesla ended Q1 with $18 billion in cash and cash equivalents and reported earnings per share of $2.86.

Contributing to Tesla’s dramatic rise in profits are the increased prices of its vehicles. The Model 3 now starts at $46,990 which is 34 per cent more than three years ago and while speaking on the carmaker’s earnings call, Musk said that rising costs and strong demand had prompted Tesla to increase prices.

“It may seem like maybe we’re being unreasonable about increasing the prices of our vehicles given that we had record profitability this quarter, but the wait-list for our vehicles is quite long,” Musk said. “And some of the vehicles that people will order, the wait-list extends into next year. So our prices of vehicles ordered now are really anticipating supplier and logistics cost growth that we’re aware of and believe will happen over the next 6 to 12 months.”

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Tesla did face some adversity in Q1. A Covid-19 outbreak in China forced the company to pause production at its Shanghai factory but Musk is confident the factory can bounce back.

“Tesla Shanghai … is coming back with a vengeance,” he said, CNN reports. “So I think notwithstanding new issues that arise, I think we will see record output per week from [Tesla’s factory in] Shanghai this quarter, albeit we are missing a couple of weeks.”

Musk believes Tesla could produce 1.5 million vehicles this year. He also encouraged more owners to join the Full Self-Driving Beta program, noting the automaker seems to be making two steps forward and one step back in developing its autonomous driving systems.