Volkswagen:Quarterly Results/2023 Q2: Difference between revisions

Tesla reported gross margin of 18.2%, lower than analysts expectations of 18.8% while its operating margins declined 5% year-over-year to 9.6%, partly driven by discounts and incentives. "Our operating margin remained healthy at approximately 10%, even with price reductions in Q1 and early Q2. This reflects our ongoing cost reduction efforts, the continued production ramp success in Berlin and Texas and the strong performance of our Energy and Services & Other businesses," Tesla said in the press release.

Its automotive gross margin ex credits was 18.1% in-line with Street's estimate. But when asked whether this metric will improve in the near future after price cuts and factory improvements, CEO Elon Musk responded, “The short-term variances in gross margin and profitability really are minor relative to the long-term picture. Autonomy will make all of these numbers look silly.”

Elon Musk said that they had to reduce prices because demand was tracking production due to high interest rates. He noted that the economy is uncertain. " So, I mean, one day, it seems like the world economy is falling apart and the next day, everything is fine. I don’t know what’s going on. It’d be totally fine. I wish I did," he said.

Its VP of Supply Chain, Karn Budhiraj said that they have seen price reduction in some of the raw materials that they use in production. "But we have seen reduction in pricing across the board for all commodities that specifically go into batteries such as nickel, cobalt and graphite. And the reductions in pricing translate into thousands of dollars when you look at it from a per-vehicle impact," he said.