Tesla wants to “use our cost leadership as a lever”. The lower margins due to price reductions “can be managed”.
Tesla was able to increase its sales in the first quarter of 2023. Operating profit, net profit, and cash flow, on the other hand, have fallen significantly. This is not surprising given the price cuts in Europe, the US, and China for Tesla electric cars \. But they have to be surprised by Tesla’s pricing policy: “We expect that our product prices will continue to develop, up or down, which depends on a number of factors,” dictated the management meaninglessly.
The shareholders take it easy. After the quarterly figures were announced, Tesla shares were only around four percent cheaper in after-hours trading. Year-on-year, the share price has roughly halved and has risen by 60 percent since the beginning of the calendar year.
Tesla manufactured almost 441,000 electric cars in the first three months of the year; that is 44 percent more than a year ago but only slightly more than in the last three months of the previous year. The company delivered almost 423,000 Teslas to end customers in the first quarter of 2023 (+36% year-on-year). In addition, there is the trade in used Teslas; The company does not provide any precise information on this but reports that growth is strong and margins are excellent. The energy division has sold solar cells for 67 megawatts (+40%) and batteries for 3.6-gigawatt hours. The latter is a good four and a half times as much as in the first quarter of 2022.
Tesla’s quarterly sales rose 24 percent to $23.3 billion. That was made up of $20 billion in vehicle sales (+18%; includes $521 million from the sale of emissions certificates), a good $1.5 billion in sales from the energy sector (+148 percent), and $1.8 billion in services and other income (+44%). The latter number includes, among other things, sales from the sale of used Teslas and sales from the sale of electricity at charging stations.
Tesla’s operating profit fell by a quarter to $2.7 billion. Net income fell in the same proportion to $2.5 billion. Operating cash flow even dropped 37 percent to $2.5 billion. Free cash flow after capital expenditures (capex) fell 80 percent to just $441 million. Management emphasizes that cost-cutting programs are already in the works.
The supply in the money store, in which Tesla now stashes 22.4 billion dollars, has grown by a quarter year-on-year. This reflects Tesla’s record year 2022.