Tesla falls after lower pricing, high expenses contribute to margin miss
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Tesla (NASDAQ:TSLA) moved lower in after-hours trading on Wednesday after missing EPS and margin estimates with its Q1 earnings report.
The Austin-based company generated $2.5B in GAAP net income during the quarter and $2.9B in non-GAAP net income.
The electric vehicle powerhouse reported that it delivered 422,875 vehicles in Q1. The tally included 412,180 Model 3/Model Y vehicles and 10,695 Model S/Model X vehicles. The company produced 440,808 vehicles during the quarter.
Operating margin came in at 11.4% of sales to fall from last quarter's mark of 16.0%. Higher raw material, logistics, commodities, and warranty costs were cited. Total GAAP gross margin was 19.3% vs. 29.1% a year ago, 23.8%% in the prior quarter and the consensus estimate of 23.0%. CFO Zachary Kirkhorn had stated previously that FY23 automotive gross margin should remain above 20% with average selling prices in the high $40K range
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Business update: Tesla (TSLA) pointed to strong early results in the new market of Thailand. Notably, the Model Y production line in Germany produced over 5,000 vehicles in a week towards the end of Q1. Shanghai was said to be running near full capacity. For 2023, TSLA expects to remain ahead of the long-term 50% CAGR with around 1.8M cars for the year. The Cybertruck remains on track to begin production later this year at Gigafactory Texas. Looking ahead, Tesla (TSLA) said it expect that product pricing will continue to evolve, upwards or downwards, depending on a number of factors.
Tesla (TSLA) ended the quarter with a cash position of $22.4B, driven by free cash flow of $441M (-80% year-over-year), partially offset by debt repayments and financing activity.
Shares of Tesla (TSLA) fell 2.78% in after-hours trading to $175.73 after shedding 2.02% during the regular session. The 52-week high for Tesla is $364.08.
The TSLA conference call is scheduled for 5:30 p.m. ET and could feature more color on pricing and demand trends
Sector peers in after-hours trading: Lucid Motors (LCID) -0.79%, Fisker (FSR) -0.13%, Rivian Automotive (RIVN) -0.55%, General Motors (GM) -0.19%, Ford (F) -0.09%.
Read the latest breakdowns on Tesla from Seeking Alpha authors.