Tesla misses revenue mark as lowered car prices results in few takers

theguardian.com:

Tesla narrowly missed Wall Street expectations in the first quarter of 2023 and gross margins dropped significantly in a signal that a series of price cuts could hurt the company’s financials. The company posted a revenue of 85 cents a share on $23.33bn total revenue, just below analysts’ prediction of 86 cents a share on $23.34bn.

Gross margins, a figure that investors are paying close attention to this quarter, dropped from 29.1% to 19.3% year-over-year after the company rolled out a series of recent price cuts.

Tesla cut prices again on Tuesday evening, hours before the company was scheduled to release its first quarter earnings. The series of reductions has brought down the costs of the Models S, 3 and X considerably since the start of the year. Prices of Model Y vehicles were cut by $3,000 on Tuesday, and there was a 4.7% cut to the Model 3 price, which is now under $40,000 for the first time.

“Our near-term pricing strategy considers a long-term view on per vehicle profitability given the potential lifetime value of a Tesla vehicle through autonomy, supercharging, connectivity and service,” the Tesla earnings report read.

The latest price cuts mark the second reduction this month and come after the company fell short of expected deliveries. Tesla announced it delivered a total of 422,875 vehicles in the three-month period ending in March, just short of analysts’ expected 430,000 deliveries. The company said it produced 440,808 vehicles this year.

First-quarter revenue also slightly declined quarter-over-quarter, but grew significantly year-over-year from $18.76bn.

Tesla shares, which are up about 50% this year, saw a 2.5% drop on Wednesday morning in response to the new round of price cuts as investors grew wary of the