Electric vehicle manufacturing company, Tesla, released its latest financial reports, showing an increase in profits despite its decision to cut prices on some of its products.
On the other hand, the company's stock (TSLA) went down in price after Tesla reported a revenue and earnings beat. Additionally, officials noted that margins came in below their expected numbers.
Tesla Reports Increased Profits
Tesla CEO Elon Musk also suggested that the company's Q3 production would be slightly down compared to the previous quarter. The company reported Q2 revenue of $24.9 billion, which went beyond street estimates of $24.51 billion, which had adjusted EPS at $0.91, compared to estimates of $0.81.
The company also reported an adjusted net income of $3.1 billion, higher than the estimated $2.87 billion and even the adjusted net income of $2.9 billion from Q1. Tesla's Q2 gross margin was found to come in at 18.2%, which was slightly below the estimated 18.8%, as per Yahoo Finance.
The company said its operating margin remained healthy at roughly 10%, even with the Q1 and early Q2 price cuts. It added that the situation reflects the manufacturer's ongoing cost reduction efforts, the continued production ramp success in Berlin and Texas, and the powerful performance of the company's Energy and Services & Other businesses.
Additionally, Tesla recently announced that it has completed the manufacture of its first Cybertruck and is working on equipment installation at its Gigafactory located in Austin, Texas. Officials noted that initial production is slated to begin later in 2023 alongside the first customer deliveries.
Musk also noted that Tesla now has 50,000 Supercharger connectors and more than 5,000 stations located worldwide. The billionaire entrepreneur disclosed that the company is already in its early discussions with a "major OEM" regarding licensing full-self-driving (FSD) software.
Implementing Price Cuts
Tesla's price cuts were made following the company facing competition from already-established automakers in the electric vehicle market. According to CNN, another factor was rising interest rates that caused the costs of purchasing a car to climb higher than most buyers are willing to spend.
Despite the less-than-favorable situation, Tesla officials said they have the right tools to address the issues and achieve long-term success. They noted that they are still pushing through with plans to sell 1.8 million vehicles in 2023, a number that is 37% higher than the company's total last year.
Tesla's recent unveiling of its first Cybertruck production comes after four years of delay since the product was first revealed to the public. When it was showcased, Musk touted the vehicle's durability but was undermined after testing it out and causing a crack in the truck's windows.
The company also released new measurements for the Cybertruck, and Musk noted that they plan to continue to build release candidates of the product on the company's Gigafactory production. The CEO also claimed that it comes with a "lot of new technology," said The Verge.
