Tesla CEO Elon Musk attends the official opening of Tesla’s new electric car manufacturing plant near Gruenheide, Germany, March 22, 2022. Officially he is called the Gigafactory Berlin-Brandenburg, and the new factory produces batteries for the Model Y and electric vehicles.
Christian Marquardt – Poole/Getty Images
Market share of electric vehicle manufacturers Tesla It fell about 7% on Thursday, a day after the company reported more than 20% declines in both net income and GAAP earnings compared to the same period last year.
Tesla reported first-quarter 2023 net income of $2.51 billion, down 24% year-over-year, and GAAP earnings per share of 73 cents, down 23% year-over-year. Tesla CEO Elon Musk has also suggested the company prefers to increase sales volume over profit margins, a comment that raised analyst concerns.
“We believe that more volume and a larger fleet is the right choice here, rather than less volume and more margins,” Musk said on the earnings call. Tesla has cut its U.S. price six times since January, with the most recent cut being this Tuesday.Tesla cut its price Model 3 11% this year. The price of that Model Y has been reduced by 20%.
Wells Fargo’s memo Thursday noted long-term damage to Tesla’s brand, saying, “Given the risks of the LT brand, we are cautious about discounting. Wells Fargo has set a target price for the company at $190. to $170.
Oppenheimer analysts say Tesla will benefit over time from increased market share that price cuts could bring, but “short-term margin pressure” will remain a “concern for investors”. writing. Oppenheimer puts a performance rating on Tesla stock.
Tesla’s stock remains up from a dismal 2022 performance that reflected a broader recession for tech companies. The electric car maker’s shares are up nearly 47% year-to-date as of Wednesday’s close.
Watch: Tesla price cuts ‘one-way street’ to stay in customers’ minds
