Tesla’s high operating margin took a hit in Q2 2023 in part due to recent sample 3 And Model Y prices, but Elon Musk backed this strategy to the end during turbulent times.
The electric vehicle (EV) leader’s latest financial report shows an operating margin of 9.6% in Q2 2023 (Q2), compared with 11.4% in Q1 2023 and 14.6% in Q2 last year.
It comes from a slight year-on-year (YoY) drop in operating income to $2.4 billion (AU$3.5 billion) and a 38.5% drop from the fourth quarter of last year. Tesla reported a gross margin of 18.2% for the April-June period, the lowest in 16 quarters, but still well above the industry average,
It attributes the results to factors such as a decrease in the average selling price of the vehicle, the cost of increasing the output of 4680 battery cells, the operating costs of the vehicle. Cybertruck is finally near productionand negative foreign exchange effects.
Tesla managed to deal a fatal blow to rivals this year thanks to its ability to mass-produce electric cars, reducing prices in the US, China and Australia (among other regions). There was also a need to clear inventory as production in their factories ramped up.
Company Set a record of 480,000 vehicles in Q2 and delivered 466,000 units, with total revenue from its automotive, energy generation and storage operations and service operations reaching a record $25 billion (AU$37 billion).
“One day it looks like the world economy is collapsing, the next day everything is fine. I don’t know what the hell is going on,” Musk told analysts on a conference call, as reported by the company. Reuters. “We’re in, I might call it a tumultuous period.”
“…I think it makes sense to sacrifice profits to produce more vehicles,” he added.
THAN: Tesla Australia drops prices to new lows
Earlier this month Tesla join 15 Chinese car manufacturers when he signed a pledge to effectively end the electric car price war there and promote “core socialist values”.
The company said it is installing the necessary production equipment for the Cybertruck at the Gigafactory Texas before starting production this year. It also noted that Berlin-Brandenburg had begun production of the standard Model Y and said the Shanghai plant supplying Australia “successfully operated at near full capacity for several months”.
“In short, we are focused on reducing costs, developing new products that drive future growth, investing in R&D, financing options for better vehicles, continuous product improvement, and free cash flow generation,” it added.
“The challenges of this uncertain time are not over yet, but we believe we have the right ingredients for the long-term success of the business through a variety of high-potential projects.”
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