In the past six months, Tesla's global frequency of price cuts can be described as "crazy," especially before the earnings announcement, and announced the sixth price cut this year in North America.。In this regard, some investors began to express deep concern about its gross margin and overall profit margin.。

Tesla trades profits for market

On Wednesday (April 19) after the U.S. stock market, Tesla announced its first quarter 2023 earnings。Tesla's revenue increased 24% year-on-year to 233 in the first quarter of this year, according to earnings data..2.9 billion U.S. dollars, basically in line with market expectations of 233.$500 million; net profit 25.$1.3 billion, down 24% YoY, adjusted net profit 29.$3.1 billion, down 22% YoY; Adjusted EPS of 0.$85, down 21% year-over-year, the first EPS year-over-year decline since Q3 2019。

Then there is the issue of gross margin, which is most relevant to investors.。Tesla's auto business gross margin for the first quarter was 21.1%, down from 25 in the fourth quarter of last year..9% and 32% in the first quarter of last year.9%。Overall gross margin for the first quarter was 19.3%, also down from 23% in the fourth quarter of last year..8% and 29% in the first quarter of last year.1%, while underperforming market expectations of 21.2%。But some analysts say Tesla's gross margin level is still far ahead in the automotive industry。

By business, Tesla's core automotive business had first-quarter revenue of 199.$6.3 billion, up 18% year-on-year, but down more than 6% month-on-month。Tesla's overall sales in the first quarter were boosted by continued price cuts to stimulate consumption。Total Model S / X / 3 / Y production rose 44% year-on-year to 440,808 vehicles in the first quarter, according to earnings data, and deliveries also rose 36% year-on-year to 422,875 vehicles, both record highs in a single quarter.。

It is worth noting that the energy production and storage business performed particularly well in this quarter's results.。Tesla's first quarter, energy production and storage business revenue of 15.2.9 billion U.S. dollars, up 148 percent year-on-year。Earlier, Musk said in his "ambitious plan" that he would make a full shift to sustainable energy, aiming to achieve 100% sustainable energy by 2050.。At the same time, Tesla has also established a super energy storage plant in Shanghai, so it seems that Tesla's revenue source may have to shift from selling cars to selling energy.。

To meet production and sales targets, Musk said he would continue to cut prices

After reading Tesla's weaker-than-expected earnings report, let's take a look at how its CEO Musk sees this "answer sheet."。

In a post-earnings call, Tesla CEO Elon Musk highlighted the "uncertain" marketing economy, which could affect people's car purchase plans.。In a Q & A with analysts, Musk said he expects 12 months of "stormy weather" for the economy.。

He warned that "every time the Fed raises rates, it's the equivalent of a car price hike."。He also said that whenever there is uncertainty about the economy, people usually put off "massive new capital purchases like a new car."。

"We believe that driving higher production volumes and larger fleets is the right thing to do, not lower sales volumes and higher margins," he said, but noted that he expects Tesla vehicles "to be able to generate substantial profits from autonomous driving over time."。

In short, despite the decline in profit margins, Musk will continue to resolutely fight a "price war," at the same time, Musk is confident that this year to get his previously promised autopilot, in order to improve profits.。

In addition, the conference call also revealed that for the rest of the year, Tesla will continue to focus on the benefits and costs of the 4680 battery to prepare for the production and operation of Cybertruck (Tesla pickup) next year.。