Investor's Corner
Tesla (TSLA) Q1 2023 earnings results: $23.3B in revenue, 19.3% non-GAAP gross margins
Tesla (NASDAQ:TSLA) posted its Q1 2023 earnings report after markets closed today. The results, which were discussed in the Q1 2023 Update Letter, were released after the closing bell on Wednesday, April 19, 2023.
Tesla’s earnings come on the heels of the company’s aggressive pricing strategy and record delivery numbers. In the first quarter, Tesla produced 440,808 vehicles and delivered 422,875. That’s a new record for the EV maker, which is quite impressive considering that Q1 is relatively short and it gets hit by holidays like the Chinese New Year.
The following is a quick overview of Tesla’s Q1 2023 results.
Earnings per Share
Tesla’s earnings per share for the first quarter of 2023 was listed at $0.85, which was right in line with analyst expectations of $0.85 as per estimates compiled by Refinitiv.
Revenue
Tesla posted revenues of $23.33 billion, which was a slight beat of the $23.21 billion that was expected by analysts compiled by Refinitiv. Automotive revenue, a core segment of Tesla’s business, was listed at $19.96 billion in Q1 2023.
Overall, revenue grew 24% YoY in Q1 to $23.3 billion year-over-year. This was impacted by a growth in vehicle deliveries, reduced ASP year-over-year, and negative FX impact of $0.88 billion.
Gross Margin
Tesla’s gross margin for the first quarter of 2023 was listed at 19.3%. In Q1 2022, Tesla’s gross margin was listed at 29.1%.
Profitability
Tesla’s operating income decreased YoY to $2.7 billion in Q1, resulting in a 11.4% operating margin. The company noted that operating income was affected by growth in vehicle deliveries, reduced ASP YoY, higher raw material, commodity, logistics and warranty costs, cost of production ramp of 4680 cells, and lower credit revenue, among others.
Net Income and GAAP Earnings
Net income, however, came at $2.51 billion, down about 24% from the past year. GAAP earnings were listed at $0.73, which is down about 23% from Q1 2022.
Cash
At the end of Q1 2023, Tesla’s cash, cash equivalents, and investments rose sequentially by $217 million, reaching a total of $22.4 billion. This was fueled in no small part by free cash flow of $441 million, though it was somewhat tempered by other financial activities such as debt repayments.
On Pricing and Affordability
A key focus of this quarter’s results would be Tesla’s pricing, which mostly got lower in Q1. In the recently released Update Letter, Tesla explained that while most of the automotive sector is still struggling with the economics of their respective EV programs, the company is looking to leverage its position as a cost leader. Tesla also highlighted that its pricing strategy considers a long-term view per vehicle.
“Our near-term pricing strategy considers a long-term view on per vehicle profitability given the potential lifetime value of a Tesla vehicle through autonomy, supercharging, connectivity, and service. We expect that our product pricing will continue to evolve, upwards or downwards, depending on a number of factors. Although we implemented price reductions on many vehicle models across regions in the first quarter, our operating margins reduced at a manageable rate. We expect ongoing cost reduction of our vehicles, including improved production efficiency at our newest factories and lower logistics costs, and remain focused on operating leverage as we scale.”
Vehicle Program Highlights
Tesla shared a number of updates on its vehicle programs in its Q1 2023 Update Letter. The company, for one, revealed that Cybertruck factory tooling is on track, and it is currently producing Alpha versions of the all-electric pickup truck.
Over the first quarter of 2023, the Tesla Model Y crossover also became the best-selling vehicle in Europe in Q1. The vehicle was also the best-selling vehicle in the United States during the quarter, at least outside pickup trucks.
Tesla’s Q1 2023 Update Letter can be found below.
Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.
Investor's Corner
Tesla is ‘better-positioned’ as a company and as a stock as tariff situation escalates
Tesla is “better-positioned” as a company and as a stock as the tariff situation between the United States, Mexico, and Canada continues to escalate as President Donald Trump announced sanctions against those countries.
Analysts at Piper Sandler are unconcerned regarding Tesla’s position as a high-level stock holding as the tariff drama continues to unfold. This is mostly due to its reputation as a vehicle manufacturer in the domestic market, especially as it holds a distinct advantage of having some of the most American-made vehicles in the country.
Analysts at the firm, led by Alexander Potter, said Tesla is “one of the most defensive stocks” in the automotive sector as the tariff situation continues.
The defensive play comes from the nature of the stock, which should not be too impacted from a U.S. standpoint because of its focus on building vehicles and sourcing parts from manufacturers and companies based in the United States. Tesla has held the distinct title of having several of the most American-made cars, based on annual studies from Cars.com.
Its most recent study, released in June 2024, showed that the Model Y, Model S, and Model X are three of the top ten vehicles with the most U.S.-based manufacturing.
Tesla captures three spots in Cars.com’s American-Made Index, only U.S. manufacturer in list
The year prior, Tesla swept the top four spots of the study.
Piper Sandler analysts highlighted this point in a new note on Monday morning amidst increasing tension between the U.S. and Canada, as Mexico has already started to work with the Trump Administration on a solution:
“Tesla assembles five vehicles in the U.S., and all five rank among the most American-made cars.”
However, with that being said, there is certainly the potential for things to get tougher. The analysts believe that Tesla, while potentially impacted, will be in a better position than most companies because of their domestic position:
“If nothing changes in the next few days, tariffs will almost certainly deal a crippling blow to automotive supply chains in North America. [There is a possibility that] Trump capitulates in some way (perhaps he’ll delay implementation, in an effort to save face).”
There is no evidence that Tesla will be completely bulletproof when it comes to these potential impacts. However, it is definitely better insulated than other companies.
Need accessories for your Tesla? Check out the Teslarati Marketplace:
- https://shop.teslarati.com/collections/tesla-cybertruck-accessories
- https://shop.teslarati.com/collections/tesla-model-y-accessories
- https://shop.teslarati.com/collections/tesla-model-3-accessories
Please email me with questions and comments at joey@teslarati.com. I’d love to chat! You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.
Tesla (NASDAQ: TSLA) received a price target boost from analysts at Truist Securities, but it came with some criticisms based on a lack of information on several things that investors were excited to hear about regarding future vehicles and AI achievements.
Last night, Tesla reported its earnings from the fourth quarter of 2024, and while it had a very tempered financial showing, missing most of the Wall Street targets that were set for it, the stock was up after hours and on Thursday due to the details the company released regarding its plans for 2025.
CEO Elon Musk stunned listeners last night by revealing plans to launch unsupervised Full Self-Driving as a service in Austin in June 2025. It will be the first time Tesla will offer driverless FSD rides in public, something it has been working with the City of Austin on since December.
Tesla to launch unsupervised Full Self-Driving as a service in Austin in June
It also reiterated plans for affordable models to be launched this year, potentially catalyzing annual growth in deliveries, something it said it expects to resume in 2025.
Tesla was flat on deliveries in 2024 compared to 2023.
The positives during the call were enough for Truist Securities analyst William Stein to raise the company’s price target to $373 from $351. However, Stein’s note to investors showed there was something to be desired despite all the good that was revealed during the call:
Stein said there was “not enough ground-truth” during the call and too much of a focus on “cheerleading” the company’s potential releases this year:
“Too much cheerleading; not enough ground-truth. In Q4, TSLA’s ASP weakness drive revenue, GPM, OPM, & EPS below consensus.”
As previously mentioned, Tesla did report weak financials that missed consensus estimates. What saved the call and perhaps the stock from plummeting on these missed metrics was the other details that Musk revealed, especially the FSD launch in Austin in June.
There were also plenty of things related to the affordable models and other vehicles, like the fact that Tesla plans to include things like Steer by Wire, Adaptive Air Suspension, and Rear Wheel Steering, that helped offset negatives.
Stein saw this as a distraction from what should have been reported:
“While CEO Elon Musk played the role of cheerleader, calling for TSLA’s path to massive market cap by leading in autonomy, management was remarkably short on two critical details: (1) info about new vehicles in 2025 and (2) milestones for AI acheivements, especially FSD. We continue to ask ourselves ‘where’s the beef?’ CY26 EPS to $3.99 (from $4.87). DCF-derived PT to $373 (from $351).”
Tesla did detail some AI milestones, like its record-breaking miles per accident on Autopilot, which was a Q4-best of 5.94 million miles. The Shareholder Deck also outlined major upgrades to AI:
“In Q4, we completed the deployment of Cortex, a ~50k H100 training cluster at Gigafactory Texas. Cortex helped enable V13 of FSD (Supervised)1, which boasts major improvements in safety and comfort thanks to 4.2x increase in data, higher resolution video inputs, 2x reduction in photon-to-control latency and redesigned controller, among other enhancements.”
Tesla shares are up 2.11 percent on Thursday as of 12:05 p.m. on the East Coast.
Need accessories for your Tesla? Check out the Teslarati Marketplace:
- https://shop.teslarati.com/collections/tesla-cybertruck-accessories
- https://shop.teslarati.com/collections/tesla-model-y-accessories
- https://shop.teslarati.com/collections/tesla-model-3-accessories
Please email me with questions and comments at joey@teslarati.com. I’d love to chat! You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.
Tesla has released its Q4 2024 vehicle safety report. Similar to data from previous quarters, vehicles that were operating with Autopilot technology proved notably safer.
The Q4 2024 report:
- As per Tesla, it recorded one crash for every 5.94 million miles driven in which drivers were using Autopilot technology.
- The company also recorded one crash for every 1.08 million miles driven for drivers who were not using Autopilot technology.
- For comparison, the most recent data available from the NHTSA and FHWA (from 2023) showed that there was one automobile crash every 702,000 miles in the United States.
Previous safety reports:
- In Q3 2024, Tesla recorded one crash for every 7.08 million miles driven in which drivers were using Autopilot technology and one crash for every 1.29 million miles driven by drivers not using Autopilot technology.
- In Q2 2024, Tesla recorded one crash for every 6.88 million miles driven in which drivers were using Autopilot technology, and one crash for every 1.45 million miles driven for drivers not using Autopilot technology.
- In Q1 2024, Tesla recorded one crash for every 7.63 million miles driven in which drivers were using Autopilot technology, and one crash for every 955,000 million miles driven for drivers not using Autopilot technology.
Year-over-Year Comparison:
- In Q4 2023, Tesla recorded one crash for every 5.39 million miles driven in which drivers were using Autopilot technology and one crash for every 1.00 million miles driven for drivers not using Autopilot technology.
Key background:
- Tesla began voluntarily releasing quarterly safety reports in October 2018 to provide critical safety information about our vehicles to the public.
- On July 2019, Tesla started voluntarily releasing annual updated data about vehicle fires as well.
- It should be noted that accident rates among all vehicles on the road can vary from quarter to quarter and can be affected by seasonality, such as reduced daylight and inclement weather conditions.
Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.
Armored Tesla Cybertruck “War Machine” debuts at Defense Expo 2025
Tesla Megapacks chosen for 548 MWh energy storage project in Japan
