Last Update: April 20, 2023, 03:12 AM IST
Profit came in at $2.5 billion, down 24 percent from the year-ago period on revenue of $23.3 billion, which was up 24 percent. (Photo: IANS)
Elon Musk-led Tesla reported overall gross margin of 19.3 percent, compared with expectations of 22.4 percent, according to 14 analysts surveyed by Refinitiv.
Tesla Inc missed market estimates for first-quarter total gross margin on Wednesday, amid a series of aggressive price cuts aimed at boosting demand in a weak economy and fending off rising competition.
Elon Musk-led Tesla reported overall gross margin of 19.3 percent, compared with expectations of 22.4 percent, according to a poll of 14 analysts polled by Refinitiv.
Shares of the Austin, Texas-based automaker fell nearly 4 percent in trading after the bell.
The electric-vehicle maker has slashed prices in the United States, China and other markets several times since late last year, as Musk said Tesla was sacrificing its industry-leading margins to drive volume growth during the downturn. Could
Analysts say, however, that Tesla may need to cut prices further, especially under pressure from an ongoing price war in China and its older line-up of cars as its new factories in Berlin and Texas To increase the demand of.
In the United States, where federal subsidies have only modestly boosted sales recently, Tesla has cut car prices six times so far this year, which has dragged down its automotive gross margin. It has also extended the price cut to Singapore, Israel and Europe.
Finance chief Zachary Kirkhorn promised in January that Tesla would not go below a 20 percent margin and an average selling price of $47,000 across all models.
The company reported first-quarter revenue of $23.33 billion, compared to consensus estimates of $23.21 billion, according to 22 analysts polled by Refinitiv.
“We also suspect that Tesla’s decision to continue cutting prices will prove to be a headache for competitors,” Canaccord Genuity analyst George Giannarikas said in a broker note. “While Tesla’s industry-leading margins will be discarded in the near term (as expressed on the company’s 4Q22 earnings call), many EV competitors are struggling to turn a profit.”
Tesla’s sixth price cut on Tuesday before results dragged down its shares and those of its EV rivals Lucid and Rivian.
Shares of these companies declined slightly in post market trading on Wednesday.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)
