Tesla announces its results for the first quarter of 2023. If the firm breaks a new delivery record, however, it could see its profits fall. In question, the sharp drop in prices on all electric cars in its range, which prompted customers to take the plunge.
Everything seems to be going well for Tesla, even if the manufacturer must prepare to take the full brunt of Chinese competition which could make it go through a year that is not as easy as expected. But for now, the firm is doing well, after a complicated period in 2022, with weak sales in China and large stocks to sell. This did not prevent it from breaking a sales record, with more than a million cars delivered worldwide.
Very good results
Last week, Elon Musk’s company announced another record, with 5,000 Model Ys produced at its Gigafactory in Berlin. And now more than 4,000 electric cars produced per week in Texas, in Austin as we can see on Twitter. A great performance for the electric SUV, which has already been the best-selling car in Europe on several occasions and which could happen top of the charts worldwide. Because the start of this year 2023 is looking pretty good for Tesla.
The manufacturer has just unveiled its results for the first quarter. And the numbers are more than encouraging. In its press release, Tesla announces that it has produced no less than 440,808 cars over the past three months. In total, 422,875 units were delivered worldwide over the same period.
For memory, 405,000 cars were returned to their owners during the 4th quarter of 2022. Thus, Tesla broke a new record, thanks in particular to its factories in Berlin and Texas which are running at full speed. The Shanghai Gigafactory, the brand’s most productive, also contributed a lot to this success, especially since the health restrictions linked to Covid-19 have all been lifted.
However, all is not all rosy either. Indeed, and as the journalists of BFM-TV, analysts still expected better. They were counting on more than 430,000 cars delivered over the same period. But Elon Musk obviously does not want to rest on his achievements and plans to deliver approximately 1.8 million vehicles over the whole of 2023.
And the benefits?
Looking in detail, we notice without much surprise that it is the Model 3 and Model Y duo that has been the most popular with customers. In fact, 421,371 units of the two vehicles were produced and 412,180 delivered. By comparison, only 19,437 Model S and Model X were assembled and 10,695 were handed over to their new owners. In other words, the difference is incredible.
In question, the significantly lower prices of the compact sedan and SUV. Especially since both took advantage of a significant price drop last January, going as low as 13,000 euros in France. Thus, the Model Y starts at 46,990 euros while the Model 3 is displayed from 44,990 euros. Both are now eligible for the ecological bonus of 5,000 euros.
The Model S and Model X also benefited from a small price drop in the United States, but not in France: their prices remain much higher. We must respectively count 113,990 and 121,990 euros for the entry-level version. It is therefore the prices of the brand’s two smallest models that have prompted customers to order. But wouldn’t that hurt your finances? Because who says lower price means falling margins. For example, this is why Ford does not want to immediately lower the prices of its cars.
Certainly, Tesla could record a small drop in profits. But investors need not worry. Indeed, the manufacturer displayed a gross margin of 25.9% during the 4th quarter of 2022, one of the largest in the automotive industry. According to the brand’s financial director, this should still be above 20% in 2023. Beware, however, of BYD, the world’s number 2 electric car, which could become the segment leader this year or next. if Tesla does not multiply its factories.
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