Tesla exceeded expectations with the quarterly figures it presented on Wednesday after the close of trading. The electric car maker reported net income of $2.7 billion for the past three months. The impact of price cuts on profit margins was lower than expected. Tesla’s share price was initially slightly up in after-hours trading. The price has more than doubled since the beginning of the year. That, however, came after significant losses over the past year, and the stock is still a long way off its previous peak to date.
As Tesla reported a few weeks ago, the number of vehicles delivered rose by 83 percent to 466,000 in the past quarter. However, the company bought this with price cuts across the board. Analysts were concerned that this could have a significant impact on profit margins, especially since CEO Elon Musk himself said in the spring that sales figures are currently more important to him than profits. He has admitted his customers are very price sensitive.
Manufacturers rely on price reductions
In fact, margins contracted in the most recent quarter. The operating profit margin was 9.6 percent, in the first quarter it was 11.4 percent, a year ago even 14.6 percent. However, Tesla’s margins are still above the industry average, and the company describes them as “healthy” despite the recent decline. Net income of $2.7 billion in the most recent quarter was up 20 percent year-on-year. However, Tesla also had a few quarters with net income in excess of $3.5 billion last year.
Tesla isn’t the only company looking to cut prices in the electric car market. Just a few days ago it became known that the American competitor Ford had significantly reduced the base price for its F-150 Lightning electric pick-up van.
Beyond the price cuts, there is currently another price effect for Tesla on the American home market: Since the beginning of the year, buyers of many Tesla models have been able to benefit from tax credits of $7,500 that are being awarded as part of the Inflation Reduction Act legislative package.
For the car manufacturer, the past quarter was also characterized by major announcements relating to the charging network. He formed alliances with competitors such as Ford, General Motors and Mercedes-Benz, which will soon have access to his so-called supercharger stations in North America. These partnerships put Tesla on the way to establishing its charging stations as the standard in its home market.
After some time, Tesla is again promising the introduction of a new model soon. A few days ago, Musk tweeted a photo with a copy of the futuristic-looking pickup “Cybertruck”. He said this is the first Cybertruck to roll off the assembly line at the Austin, Texas plant. The company now said it is closer to delivering the vehicle to customers for the first time this year. The Cybertruck is Tesla’s first new passenger car since the Model Y, which came out more than three years ago.
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