U.S. electric vehicle maker Tesla posted higher sales in the third quarter than the previous year, but its net profit fell sharply.
Tesla said in its earnings report released on the 18th (local time) that its third-quarter general accounting standard (GAAP) net profit was $1.853 billion down 44% from the same period last year ($3.29 billion).
The third-quarter operating margin was 7.6%, down 9.6 percentage points from a year earlier (17.2%). The gross profit margin was 17.9%, down 7.2 percentage points from last year (25.1%). The adjusted earnings per share (EPS) was $0.66 (W894).
Sales reached $23.35 billion, up 9% from the same period last year. It fell short of Wall Street’s average estimate of $24.1 billion.
Sales in the automobile sector rose only 5% to $19.625 billion, while sales in the energy generation and storage sectors ($1.559 billion) and sales in the service and other sectors ($2.166 billion) increased 40% and 32%, respectively, from a year ago.
“Tesla reported weaker-than-expected earnings after weighing on margins due to price cuts and sluggish sales,” Bloomberg reported. “It disappointed investors.” Analysts say Tesla’s poor performance is due to its recent price cut policy, risking a margin reduction.
However, Tesla said, “In the third quarter, our main goals of maximizing vehicle deliveries, reducing costs, generating surplus cash flow, and continuing investment in AI and other growth projects remained unchanged.”
Tesla said, “The cost of sales per vehicle in the third quarter decreased to about $37,500 (50.81 million won),” and explained, “The production cost of the new plant was still higher than that of the existing plant, but the unit price was further lowered by implementing the necessary upgrades in the third quarter and additional unit price cuts were possible.”
