Three hours after markets opened in North America on Thursday, Tesla shares were losing 9.5 % of their value and were trading at $163.4 in response to a 24 % loss of its net profit in the first quarter of the year.
Investors also did not react positively to statements made Wednesday by Tesla CEO Elon Musk, who said the company is willing to increase its sales at the expense of profit margins.
Musk acknowledged on his conference call with analysts that the results for the first three months of 2023 were a result of the price cuts the company has implemented to stimulate demand.
Tesla’s net income fell 24% to $2.513 billion, and adjusted gross operating profit (Ebitda) fell 15% from $5.023 billion in the first quarter of 2022 to $4.627 billion in the same period this year.
Equally important, operating margin fell from 19.2 % a year ago to 11.4 % in Q1 2023.
Tesla has cut prices on its vehicles at least six times so far this year. Despite this, the company has a growing number of unsold manufactured vehicles.
In the first quarter of 2023 it produced 440,808 vehicles but delivered only 422,875, meaning that from that period alone it has 17,933 cars in stock.
Despite these reductions, Musk defended that Tesla’s margin “remains among the best” in the automotive industry and added that the company’s current policy is aimed at achieving large volume sales rather than “lower volumes and higher margin.”