The American manufacturer of electric vehicles Tesla has reported this Wednesday an increase in net profit of 20% in the second quarter of the year, up to 2,700 million dollars, in the wake of sales driven by lower prices. As expected by analysts, these cuts have slightly limited the growth of Elon Musk’s company, registering an increase of 18.2% compared to 19.3% in the first quarter. The result is just below Wall Street estimates (18.8%), but well below the 25% margin of a year ago, which adds new clouds to the management of the magnate who also owns Twitter and the space company SpaceX.
But if the focus is extended until the beginning of the year, net benefits fell by 6.5% in the first half of 2023, standing at 5,216 million dollars. From January to June, revenues amounted to 48,256 million, 35.2% more than in 2022. In the second quarter, on the other hand, revenues fell to 21,268 million.
Musk has reiterated that he is comfortable sacrificing profitability for sales volume, and the data for the second quarter seems to prove him right. The company had announced record vehicle deliveries, all of them in the luxury segment. He has also assured that better days are ahead: Tesla is investing in increasing battery production, in the new Cybertruck model and in other large growth-oriented projects.
“It makes sense to sacrifice margins in favor of building more vehicles because we believe that in the not too distant future they will have a dramatic increase in valuation,” Musk said. China is one of the markets he is committed to, as demonstrated by his recent official visit, almost as a statesman, to the Asian giant.
But investors reacted negatively to weaker earnings. In addition, Musk said production in the current quarter will “go down a bit” as Tesla makes improvements to the factory. The shares fell 3.6% in extended market trading.
Tesla built 479,700 vehicles in the second quarter of this year, up from 258,580 in the same period of 2022 and 440,808 between January and March. “We plan to increase production as quickly as possible,” the company said in a statement in its results statement. “Some years, we will be able to increase faster and others, more slowly,” he said. “By 2023, we hope to get ahead of [en las previsiones] with around 1.8 million vehicles for the year”. Deliveries amounted to 466,140 vehicles in the quarter, compared to 254,695 the previous year.
“We have a lot of liquidity to finance our long-term project agenda to increase the capacity of our plants and other expenses,” the manufacturer has assured.
Sales increased by 47%, to 24,920 million euros, thanks to the increase in deliveries and the growth of the other divisions of the group, but the final result in the box was affected by a decrease in the average sale price of the different models and some unfavorable exchange rates. At the end of last year, the manufacturer announced a substantial reduction in the price of the 3 and Y models in the US. Buyers of Tesla cars in Canada and Mexico, and to a lesser extent in China, were also able to benefit from advantageous offers according to the local market.
Refering to pick up electric Cybertruck, which will be the company’s new bet and will leave the Tesla megafactory in Texas, the company has ensured that production will begin according to schedule, at the end of the year.
The accidents in which their models are involved -the last one, the day before yesterday-, the revision of thousands of cars for failures or doubts about their safety and, finally, the erratic behavior of Musk have cast doubts about the performance of Tesla, which last year suffered a severe bump, in continuous episodes, on the stock market. It was its worst stock market streak since 2018, with a loss of 70% of its value.
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