Tesla confirmed it had planned to go against the recent trend of the wider car industry and prioritise sales over profits with its recent price cuts, resulting in lower-than-expected margins for the first quarter of the year.
“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 margin,” CEO Elon Musk said on the company’s call with analysts after releasing its first-quarter figures.
Tesla delivered 422,875 vehicles in the first three months, up 36% on the same period the year before. Revenue was up 18% to almost $20 billion but operating profits fell 26% to $2.7 billion. Operating margin fell to 11.4%, down from 19.2% in the same period in 2022.
Tesla pointed to the price cuts for its best-selling Model Y and Model 3 lines globally as the reason, along with higher raw material costs.
