Tesla reported Wednesday net income of $2.51 billion in the first quarter, a 24% drop from the same period last year as the company’s EV price-cutting strategy cut into profits.
Tesla has repeatedly reduced the price of its four EVs — the Model S, Model X, Model Y and Model 3 — in the United States as well as Europe and China. That strategy has helped boost sales with revenue in the first quarter reaching $23.3 billion, a 24% pop from the same period last year.
But it has also squeezed the automaker’s traditionally robust automotive gross margins. At the same time, Tesla’s operating expenses have remained mostly flat (falling just 1% from Q1 in 2022) and its capital expenditures have increased. The company reported that it spent $2 billion in capital expenditures in the first quarter, a 17% increase from the same quarter last year.
Meanwhile, its operating margin — one measure of profitability and an area where Tesla has been an industry leader — fell from 19.2% in the first quarter of 2022 to 11.4 in this period.
techcrunch.com/2023/04/19/tesla-q1-income-falls-24-as-ev-price-cuts-squeeze-profits/
$TSLA CLOSED RED pic.twitter.com/2dTO2Lf9ih
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