Tesla Earnings, Tesla Lessons for Apple (Daily Update)
Hello everyone. Earnings season is upon us.
The plan for this earnings cycle is to focus in particular on larger themes and base our discussions around any changes or developments to those themes. We will kick things off with Tesla and the auto space. After going over the main takeaways from Tesla’s earnings, we look at some lessons that Apple can learn from regarding how best to navigate the EV space.
Tesla Earnings
“Tesla Inc. felt the pain of a recent wave of price cuts, as a reduction in the average price of its cars contributed to a 24% decline in first-quarter profit.
Elon Musk’s electric-vehicle maker has lowered prices for models in the U.S. by between 14% and 25% this year as it contends with weaker demand, higher interest rates and burgeoning competition. The latest round of reductions came on the eve of earnings.
‘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,’ Mr. Musk, Tesla’s chief executive, said Wednesday on an earnings call, adding that he expects to be able to harvest additional software revenue down the line.
Teslas sold for an average of around $46,000 in the first quarter, less than the company had forecast and down from some $52,200 in the first three months of 2022.”
Tesla's core automative gross margins – excluding ZEV credits – declined to 16% from 26% the previous year. While those are good margins for an automaker, many have spent years saying Tesla wasn't a regular automaker. Vehicle deliveries were
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