The EV leader’s results beat analysts’ expectations for earnings despite lower profit margins per vehicle. Analysts are eyeing the automaker’s gross margins following price cuts of up to 20% on some models and trims this month.
The company said it had revenue of $24.32 billion for the three months ended Dec. 31, compared with the average analyst estimate of $24.16 billion, according to Reuters data. Tesla sold 405,278 units in the fourth quarter.
According to Tesla, its automobile business profit margin was 25.9% in the fourth quarter, the lowest in two years.
Tesla offered discounts in major markets during the quarter after strong orders allowed the company to maintain and even raise prices in recent years. CEO Elon Musk said in December that “rapid changes in interest rates” had affected the affordability of all cars.
Tesla has outperformed the industry in recent years, posting record sales and profits and weathering the pandemic and global supply chain challenges better than its rivals. However, recent sharp global price cuts signal a move toward stimulating growth at the expense of margins, underscoring softening demand.
“Tesla’s demand outlook is much more bullish than virtually any other automaker,” CFRA Research analyst Garrett Nelson said, calling the quarter “strong.”
“Margins fell a little short. I think what we’re seeing is the impact of inflation and rising raw material costs,” he added.
Reuters contributed to this report.
https://www.autonews.com/earnings-reports/tesla-q4-earnings-net-income-surges-59-37b Tesla Q4 Earnings: Net Earnings Soar 59% to $3.7 Billion