Tesla sees margins tighten but holds the line on full-year deliveries guidance
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Tesla (NASDAQ:TSLA) moved slightly higher in after-hours trading on Wednesday after falling slightly short with its Q3 revenue and EPS tallies.
The Austin-based company generated $1.9B in GAAP net income during the quarter and $2.3B in non-GAAP net income.
Tesla (TSLA) produced 430,488 vehicles and delivered 435,059 vehicles during Q3. The electric vehicle maker said a sequential decline in volumes was caused by planned downtimes for factory upgrades. During Q2, Tesla (TSLA) delivered 466,140 electric vehicles to easily beat estimates for around 445,000 units. The company produced 479,700 vehicles in the same period. In the first quarter of 2023, Tesla delivered 422,875 vehicles and produced 440,808 units. Crucially, Tesla (TSLA) still expects full-year deliveries of 1.8M vehicles.
Operating margin came in at 7.6% of sales to fall from last quarter's mark of 9.6% and 17.2% a year ago. Reduced ASP due to mix and pricing was a drag on the margin line. Total GAAP gross margin was 17.9% compared to 25.1% a year ago and 18.2% in the prior quarter. Analysts had forecast a gross margin rate of 18.0% for the quarter. CFO Zachary Kirkhorn had stated earlier in the year that FY23 automotive gross margin should remain above 20% with average selling prices in the high $40K range, but a several pricing cuts have altered the margin story.
Solar deployed fell to 49 MW. Storage deployed was up to 4.0 GWh.
Business update: Tesla (TSLA) said it is planning to grow production as quickly as possible in alignment with the 50% CAGR target the company began guiding to in early 2021. "In some years we may grow faster and some we may grow slower, depending on a number of factors," noted the automaker. Cybertruck production remains was stated to remain track for later this year, with first deliveries scheduled for November 30th at Giga Texas. Production of TSLA's higher density 4680 cell is progressing as planned and the company continues building capacity for cathode production and lithium refining in the US. 
Tesla (TSLA) said on a year-to-date basis, free cash flow reached $2.3B while its cash and investments position continues to improve. Free cash flow was $800M in Q3.
Shares of Tesla (TSLA) tracked 0.70% higher in after-hours trading to $244.27 after shedding 4.78% during the regular session. The 52-week high for Tesla is $299.29. The TSLA conference call is scheduled for 5:30 p.m. ET and could feature updates on the Model 2, pricing, self-driving software, and the view on demand trends
Sector peers in after-hours trading: Lucid Motors (LCID) -0.16%, Fisker (FSR) -0.13%, Rivian Automotive (RIVN) -0.45%, General Motors (GM) -0.10%, and Ford (F) -0.09%.

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