Less-La – Tesla’s Quarterly Earnings 💸

Less-La – Tesla’s Quarterly Earnings

Tesla reported their first quarter earnings on Wednesday, and this was a highly awaited one for many reasons. In the past few months, the company underwent price cuts on some of their vehicles in what was a surprising move, but understandable. Additionally, Tesla’s delivery numbers reached a new record of 422,875 vehicles despite falling short of Wall Street expectations, providing two variables that would play a major role in the earnings report.

It’s safe to say that Tesla’s earnings were not great, if that’s a nice way to put it. First quarter profit for the electric vehicle business fell by 24 percent as the price cuts made a major dent in their earnings. These price cuts range from 14 percent to 25 percent, and the average sale price of a Tesla fell from $52,200 to $46,000 as a result. Demand has increased to the point where orders are exceeding production, and the delivery data was reflected in the revenue numbers, rising by 24 percent to $23.3 billion. One of the major highlights was Tesla’s operating margin, falling from 19.2 percent to 11.4 percent to reach its lowest point since the second quarter of 2021. CFO Zach Kirkhorn said that in the near term, the margins should not be worried about as investments continue to occur, and that to meet the growth targets the company would need to spend north of $150 billion in the next few years. Analysts believe that Tesla’s continued price cuts show that more need to occur to maintain the growth Musk is looking for, and it’ll be interesting to see how this affects other companies in the industry.

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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

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