(Reuters) – Tesla reported first-quarter gross margin below expectations on Wednesday, on the heels of a campaign of price cuts for its vehicles intended to fuel demand amid an economic downturn and fend off growing competition.
The group led by Elon Musk reported a gross margin of 19.3% in the January-March period, while analysts polled by Refinitiv expected an average of 22.4%.
This is the lowest since the last quarter of 2020.
Tesla was down nearly 4% in post-close trading.
Since the end of last year, the electric vehicle manufacturer has made several price cuts in the United States and China, its two main markets, as well as in other countries, Elon Musk having explained that Tesla could sacrifice its margins in order to encourage production growth in a period of recession.
However, analysts say the group is likely to have to continue to cut prices to face increased competition, particularly in China where a price war is raging, and to stimulate demand for its aging fleet as Tesla opened factories in Berlin and Texas.
Tesla confirmed on Wednesday it expects to deliver about 1.8 million vehicles this year.
The group’s first-quarter revenue was $23.33 billion, versus a consensus of $23.21 billion, according to Refinitiv data.
Tesla reported net profit of $2.5 billion, up from $3.32 billion a year earlier.
(Report Akash Sriram and Hyunjoo Jin; French version Jean Terzian)
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