Musk says Tesla will put sales growth ahead of profit
罢别蝉濒补听Inc.聽boss Elon听惭耻蝉办听on Wednesday doubled down on the price war he started at the end of last year, saying the electric vehicle (EV) maker would prioritize听蝉补濒别蝉听驳谤辞飞迟丑听补丑别补诲听of听辫谤辞蹿颈迟听in a weak economy.
The company posted its lowest quarterly gross margin in two years, missing market estimates, as it聽聽in markets including the United States and China to spur demand and fend off rising competition.
Shares in the Austin, Texas-based automaker were down 6% in after-hours trading.
“It’s better to shift a large number of cars at lower margin and harvest that margin in the future as we perfect autonomy,”听惭耻蝉办听told analysts on a conference call. He said although the economy remained uncertain, the EV maker’s orders exceeded production.
Mr. Musk, who had said earlier that he would have liked to achieve 2 million vehicle deliveries this year, declined to reaffirm that on Wednesday but stood by the company’s official target of 1.8 million deliveries.
“Tesla‘s worrying China听蝉补濒别蝉听figures indicate demand for its vehicles is slowing more than expected in the face of rising competition from local EV companies,” said Jesse Cohen, senior analyst at Investing.com.
罢别蝉濒补听said in a statement it still believed its operating margin would remain the highest among big carmakers.
The company reported total gross margin of 19.3%, short of market expectations of 22.4%, according to 14 analysts polled by Refinitiv.
罢别蝉濒补听also did not report its automotive gross margin, a figure closely watched by investors, with听惭耻蝉办听saying the weak economy making it hard to provide margin outlook.
The company posted an automotive gross margin of 19% excluding regulatory credits in the first quarter, down from 24% the previous quarter, according to Reuters’ calculation.
On Wednesday,聽罢别蝉濒补听said its average selling price declined in the first quarter from a year earlier, but it did not elaborate.
Analysts say the EV maker may need to cut prices further, pressured by a price war especially in China even as its new factories in Berlin and Texas churn out cars.
罢别蝉濒补听in the first quarter reported record inventory of $14.38 billion, up from $6.69 billion a year earlier.
It burned $154 million in cash during the quarter, and would have consumed more but for a $1.6 billion gain attributed to “proceeds from maturities of investments.”
NEW MODELS
Mr. Musk聽in 2020 announced plans to produce a new battery cell to halve the cost of the most expensive part of an EV, but the company has been struggling to ramp up production for those cells.
罢别蝉濒补听aims to cut assembly costs by half, but did not say when it will debut long-awaited affordable electric vehicles.聽罢别蝉濒补听fans have for some time hankered for聽罢别蝉濒补听to refresh its aging model line-up.
In January, Mr. Musk聽said聽罢别蝉濒补听expected to start production of Cybertruck this summer, but that volume production would not occur until next year.
Mr. Musk聽said on Wednesday’s call that he expected a delivery event for Cybertruck in the third quarter.
Tesla‘s net听辫谤辞蹿颈迟听fell by nearly a quarter to $2.51 billion from a year earlier, hurt by higher raw-materials, logistics and warranty costs as well as the production ramp-up of its 4680 battery cells.
Income adjusted for one-time items and revenue was in line with estimates from Refinitiv. – Reuters
