Tesla kicked off 2023 with its lowest quarterly profit since 2021, as it shifts focus from outright profit to sales volume.
The brand recorded a gross margin of 19.3 per cent on the back of US$23.3 billion in total revenue, down significantly on the 29.1 per cent margin it reported in the first quarter of 2022. Tesla’s share price dropped slightly on the back of the result.
Speaking with investors this morning, CEO Elon Musk said Tesla is focusing on getting a huge fleet of cars on the road at a lower margin before it can “harvest that margin in the future as we perfect autonomy”.
“Although we implemented price reductions on many vehicle models across regions in the first quarter, our operating margins reduced at a manageable rate,” Tesla said in its investor report.
“We expect ongoing cost reduction of our vehicles, including improved production efficiency at our newest factories and lower logistics costs, and remain focused on operating leverage as we scale.”
Earlier this month, the brand confirmed record production (440,808 vehicles) and delivery (422,875 vehicles) for the quarter, likely driven by the Shanghai plant which supplies Australia.
The brand has slashed prices on the Model 3 and Model Y multiple times already in 2023 for Australia, and has been even more aggressive with its pricing in the USA as competition for electric car sales hots up.
Currently, Tesla builds cars in California (Model S, X, Y, 3), Texas (Y, Cybertruck), Nevada (Semi), Shanghai (3, Y), and Berlin (Y).
It’s in the process of tooling for Cybertruck, and says it’s engaged in pilot production of the Semi truck.
The Shanghai-made Model 3 and Model Y remain the best-selling electric cars in Australia.
Tesla has delivered 7238 examples of the Model 3 and 3169 of the Model Y to date this year in Australia, putting the pair ahead of the BYD Atto 3 (3169 deliveries), MG ZS EV (916), and Volvo XC40 Recharge Pure Electric (827).