Tesla, the electric vehicle maker, saw its shares fall more than 4% after it released its first-quarter earnings report. The company reported adjusted earnings per share of 85 cents. Revenue came in at $23.33 billion, beating expectations of $23.21 billion.
Tesla’s net income was $2.51 billion, down 24% from the previous year, with GAAP earnings coming in at 73 cents, a drop of 23% from the year-ago quarter. Tesla attributed this to the “underutilization of new factories,” as well as higher raw material, commodity, logistics, and warranty costs. Lower revenue from environmental credits also contributed to the drop in earnings from the previous year.
While automotive revenue, Tesla’s core segment, reached $19.96 billion in the quarter, up 18% from last year, total revenue was up 24%. Revenue from automotive regulatory credits during the first three months of 2023 amounted to $521 million, down from $679 million in the first quarter last year.
During an earnings call, CEO Elon Musk acknowledged the “uncertain” macroeconomic environment that could impact people’s car shopping plans. He warned that every time the Federal Reserve raises interest rates, it is equivalent to an increase in the price of a car. Musk also cautioned that people tend to postpone big capital purchases like a new car during times of economic uncertainty.
Musk noted that Tesla had chosen to focus on higher volumes and a larger fleet, rather than lower volumes and higher margins. However, he expects Tesla vehicles to eventually generate significant profit through autonomy. Tesla’s energy revenue soared to $1.53 billion, up 148% compared to the same period last year, with the company’s energy storage systems deployment increasing to 3.9 GWh, a rise of 360%.
Tesla currently sells four EV models produced at two vehicle assembly plants in the US, one in Shanghai, and another outside of Berlin. While Tesla has yet to complete its mission of conducting a hands-free trip across the US, Musk remains optimistic about the future and the potential for Tesla’s self-driving technology to generate significant profits.
Tesla lowers prices for Model Y and Model 3 in the US for the sixth time this year
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