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2023-04-20

Tesla Is a Victim of a Price War It Started

New York (CNN) — Tesla helped kick off an EV price war. Now, those lower prices are hitting the comp

Tesla Is a Victim of a Price War It Started

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Now, those lower prices are hitting the comp","content":"<html><head></head><body><p><strong>New York (CNN) — </strong>Tesla helped kick off an EV price war. Now, those lower prices are hitting the company’s sales and profits.</p><p style=\"text-align: start;\">Tesla, which has cut prices on its electric vehicles four times in the quarter and twice so far this month, earned $2.9 billion excluding special items, down 22% from a year ago. Profits fell even more compared to the third and fourth quarters of last year.</p><p style=\"text-align: start;\">The lower prices caused revenue to fall $1.3 billion compared to the fourth quarter despite record deliveries, leading to tighter profit margins.</p><p>Tesla reported a gross profit margin of 19.3%. It was the lowest profit margin reported by Tesla since the end of 2020, when its operations were being significantly impacted by the early months of the pandemic.</p><p style=\"text-align: start;\">Its more closely watched automotive profit margin, excluding the bump it gets from selling emission credits to other automakers, fell to just under 19%. Both profit margins disappointed Wall Street analysts who were looking for margins to stay comfortably above 20%.</p><p style=\"text-align: start;\">While those margins were well above the profit margin of traditional automakers, it’s down nearly 10 percentage points from what it posted a year earlier and was lower than Wall Street forecasts.</p><p>Asked about the future direction of its profit margins, Tesla executives declined to give any guidance.</p><p style=\"text-align: start;\">“This is a difficult environment to make a projection like this. There’s a lot of macro uncertainty,” said CFO Zachary Kirkhorn. “There’s also headwinds and tailwinds.”</p><p style=\"text-align: start;\">He did say some costs, including logistics and commodity costs, are coming down.</p><p style=\"text-align: start;\">While the company has only a fraction of the sales of established global automakers, it is by far the most valuable automaker by market cap. It’s profit margins, and strong growth targets, are key reasons for those lofty valuations.</p><p style=\"text-align: start;\">Tesla is facing growing competition on EVs from established automakers. Some, including Ford (F), have followed by cutting the price of the Mustang Mach-E, one of its key EVs. Others, such as General Motors, have announced plans for EV models that will be less expensive than the cheapest Tesla model.</p><p style=\"text-align: start;\">But Tesla is also facing headwinds from broader economic conditions, said CEO Elon Musk on a call with investors.</p><p style=\"text-align: start;\">“It is worth pointing out that the current macro environment remains uncertain,” he said. “I think people already know [that] especially with large purchases such as cars.”</p><p style=\"text-align: start;\">He said interest rate hikes by the Federal Reserve is raising the price of cars, cutting demand. And he said worries about the state of the economy is also a problem.</p><p style=\"text-align: start;\">“Whenever there is uncertainty in the economy, people will generally postpone new – big, new capital purchases like a new car,” Musk said. “This is a natural human reaction. So if people are reading about layoffs and whatnot in the press, they’re like, well, they might be worried … they might be laid off. So then there’ll be naturally a little more hesitant than they would otherwise be to buy a new car.”</p><p>He defended the decision to cut prices, even if it means lower profit margins in the near term.</p><p style=\"text-align: start;\">“While we reduced prices considerably in early Q1, it’s worth noting that our operating margin remains among the best in the industry,” he said. “We’ve taken a view that pushing for higher volumes and a larger fleet is the right choice here versus a lower volume and higher margins.”</p><p style=\"text-align: start;\">He insisted that the price cuts have resulted in orders being in excess of production. But for the last four quarter Tesla has produced 78,000 more vehicles than it has delivered to customers, a number equal to about 5% of the cars it built during that time.</p><p style=\"text-align: start;\">Shares of Tesla (TSLA), which have rebounded this year after losing 65% of their value in 2022, were down over 7% in premarket trading Thursday following the results.</p></body></html>","source":"cnn_highlight","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Tesla Is a Victim of a Price War It Started</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nTesla Is a Victim of a Price War It Started\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-04-20 16:40 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://edition.cnn.com/2023/04/19/business/tesla-earnings/index.html><strong>CNN Business</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>New York (CNN) — Tesla helped kick off an EV price war. Now, those lower prices are hitting the company’s sales and profits.Tesla, which has cut prices on its electric vehicles four times in the ...</p>\n\n<a href=\"https://edition.cnn.com/2023/04/19/business/tesla-earnings/index.html\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"TSLA":"特斯拉","LU0097036916.USD":"贝莱德美国增长A2 USD","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","LU0689472784.USD":"安联收益及增长基金Cl AM AT Acc","LU2087621335.USD":"ALLSPRING GLOBAL FACTOR ENHANCED EQUITY \"A\" (USD) ACC","LU2326559502.SGD":"Natixis Loomis Sayles US Growth Equity P/A SGD-H","BK4527":"明星科技股","LU1852331112.SGD":"Blackrock World Technology Fund A2 SGD-H","LU1720051017.SGD":"Allianz Global Artificial Intelligence AT Acc H2-SGD","BK4588":"碎股","BK4550":"红杉资本持仓","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","LU0316494557.USD":"FRANKLIN GLOBAL FUNDAMENTAL STRATEGIES \"A\" ACC","LU1861215975.USD":"贝莱德新一代科技基金 A2","LU1548497426.USD":"安联环球人工智能AT Acc","LU1861558580.USD":"日兴方舟颠覆性创新基金B","LU1861220033.SGD":"Blackrock Next Generation Technology A2 SGD-H","LU0820561818.USD":"安联收益及增长平衡基金Cl AM DIS","BK4551":"寇图资本持仓","BK4574":"无人驾驶","LU1551013425.SGD":"Allianz Income and Growth Cl AMg2 DIS H2-SGD","BK4581":"高盛持仓","LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC","LU1720051108.HKD":"ALLIANZ GLOBAL ARTIFICIAL INTELLIGENCE \"AT\" (HKD) ACC","LU0943347566.SGD":"安联收益及增长平衡基金AM H2-SGD","BK4099":"汽车制造商","LU0234570918.USD":"高盛全球核心股票组合Acc Close","BK4511":"特斯拉概念","LU1839511570.USD":"WELLS FARGO GLOBAL FACTOR ENHANCED EQUITY \"I\" (USD) ACC","LU1861559042.SGD":"日兴方舟颠覆性创新基金B SGD","LU1429558221.USD":"Natixis Loomis Sayles US Growth Equity RA USD","LU2357305700.SGD":"Allianz Global Artificial Intelligence ET H2-SGD","BK4548":"巴美列捷福持仓","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","LU0823411888.USD":"法巴消费创新基金 Cap","LU1435385759.SGD":"Natixis Loomis Sayles US Growth Equity RA SGD-H","LU1551013342.USD":"Allianz Income and Growth Cl AMg2 DIS USD","LU0056508442.USD":"贝莱德世界科技基金A2","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","IE00B1XK9C88.USD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A\" (USD) ACC","LU0820561909.HKD":"ALLIANZ INCOME AND GROWTH \"AM\" (HKD) INC","LU0234572021.USD":"高盛美国核心股票组合Acc","LU2249611893.SGD":"BNP PARIBAS ENERGY TRANSITION \"CRH\" (SGD) ACC","IE00BSNM7G36.USD":"NEUBERGER BERMAN SYSTEMATIC GLOBAL SUSTAINABLE VALUE \"A\" (USD) ACC","BK4534":"瑞士信贷持仓","BK4585":"ETF&股票定投概念","BK4555":"新能源车","LU2063271972.USD":"富兰克林创新领域基金","BK4533":"AQR资本管理(全球第二大对冲基金)"},"source_url":"https://edition.cnn.com/2023/04/19/business/tesla-earnings/index.html","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2328910756","content_text":"New York (CNN) — Tesla helped kick off an EV price war. Now, those lower prices are hitting the company’s sales and profits.Tesla, which has cut prices on its electric vehicles four times in the quarter and twice so far this month, earned $2.9 billion excluding special items, down 22% from a year ago. Profits fell even more compared to the third and fourth quarters of last year.The lower prices caused revenue to fall $1.3 billion compared to the fourth quarter despite record deliveries, leading to tighter profit margins.Tesla reported a gross profit margin of 19.3%. It was the lowest profit margin reported by Tesla since the end of 2020, when its operations were being significantly impacted by the early months of the pandemic.Its more closely watched automotive profit margin, excluding the bump it gets from selling emission credits to other automakers, fell to just under 19%. Both profit margins disappointed Wall Street analysts who were looking for margins to stay comfortably above 20%.While those margins were well above the profit margin of traditional automakers, it’s down nearly 10 percentage points from what it posted a year earlier and was lower than Wall Street forecasts.Asked about the future direction of its profit margins, Tesla executives declined to give any guidance.“This is a difficult environment to make a projection like this. There’s a lot of macro uncertainty,” said CFO Zachary Kirkhorn. “There’s also headwinds and tailwinds.”He did say some costs, including logistics and commodity costs, are coming down.While the company has only a fraction of the sales of established global automakers, it is by far the most valuable automaker by market cap. It’s profit margins, and strong growth targets, are key reasons for those lofty valuations.Tesla is facing growing competition on EVs from established automakers. Some, including Ford (F), have followed by cutting the price of the Mustang Mach-E, one of its key EVs. Others, such as General Motors, have announced plans for EV models that will be less expensive than the cheapest Tesla model.But Tesla is also facing headwinds from broader economic conditions, said CEO Elon Musk on a call with investors.“It is worth pointing out that the current macro environment remains uncertain,” he said. “I think people already know [that] especially with large purchases such as cars.”He said interest rate hikes by the Federal Reserve is raising the price of cars, cutting demand. And he said worries about the state of the economy is also a problem.“Whenever there is uncertainty in the economy, people will generally postpone new – big, new capital purchases like a new car,” Musk said. “This is a natural human reaction. So if people are reading about layoffs and whatnot in the press, they’re like, well, they might be worried … they might be laid off. So then there’ll be naturally a little more hesitant than they would otherwise be to buy a new car.”He defended the decision to cut prices, even if it means lower profit margins in the near term.“While we reduced prices considerably in early Q1, it’s worth noting that our operating margin remains among the best in the industry,” he said. “We’ve taken a view that pushing for higher volumes and a larger fleet is the right choice here versus a lower volume and higher margins.”He insisted that the price cuts have resulted in orders being in excess of production. But for the last four quarter Tesla has produced 78,000 more vehicles than it has delivered to customers, a number equal to about 5% of the cars it built during that time.Shares of Tesla (TSLA), which have rebounded this year after losing 65% of their value in 2022, were down over 7% in premarket trading Thursday following the results.","news_type":1},"isVote":1,"tweetType":1,"viewCount":531,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":21,"xxTargetLangEnum":"ORIG"},"commentList":[],"hasMoreComment":false,"orderType":2}