Tesla experienced a large decrease in its profits: Here are the reasons Electric car manufacturer Tesla announced that it experienced a large decrease in its profits in the third quarter of 2023. Tesla's profit margins have declined due to price cuts, production cuts and investments in artificial intelligence. Tesla also postponed the delivery of the highly anticipated Cybertruck model. So, what lies behind the decline in Tesla's profits? Here are the details…
TESLA'S INCOME AND PROFIT FIGURES
Tesla announced that it earned $2023 billion in revenue in the third quarter of 23,4. This figure indicates an increase of 9 percent compared to the same period last year. However, the company's net profit was announced as 1,9 billion dollars. This indicates a 3,3 percent decrease in profit, which was 42 billion dollars in the same period last year.
Tesla's automobile deliveries increased by 27 percent in this quarter, reaching 241 thousand units. The company's current annual production capacity is stated as 2,35 million units. Tesla announced that it has an annual production capacity of 125 thousand units for the electric pickup model Cybertruck. However, Cybertruck's delivery date has been postponed to the first quarter of 2024.
Tesla's revenues on the energy and energy storage side also increased by 40 percent to $1,56 billion. Service revenues increased by 32 percent to 2,17 billion dollars. Total automotive revenues increased by 5 percent and reached 19,6 billion dollars.
REASONS FOR THE DECLINE IN TESLA'S PROFIT
There are several factors behind the decline in Tesla's profits. The first of these was that the company reduced production in its old factories while commissioning its new factories. This led to a lower-than-expected performance in deliveries. Tesla's CEO Elon Musk described this situation as "production hell."
The second factor was Tesla's price reductions. The company was forced to reduce the prices of its cars due to competitive pressure and supply-demand imbalance. This negatively affected the company's profit margins. While Tesla used to have profit margins of up to 20 percent, this rate dropped to 12 percent this quarter.
The third factor was Tesla's large investments in artificial intelligence. The company announced that it has commissioned “one of the world's largest supercomputers” to develop autonomous driving systems. This supercomputer is called Dojo and is used in training Tesla's autonomous systems. This investment is expected to benefit the company in the long term, but it increases costs in the short term.
TESLA'S POSITION IN THE ENERGY BUSINESS
Tesla is not just a car manufacturer, it's the same zamCurrently also an energy company. Tesla also operates in the fields of energy storage and solar energy. The company achieved a 90 percent increase in energy storage this quarter and stored 3.653 MWh of energy. However, solar energy installations decreased by 48 percent to 49 MW.
Tesla's revenues from its energy business increased by 40 percent, reaching $1,56 billion. The company stated that it aims to grow further in this field. Tesla's energy business has lower profit margins than its auto business but has higher growth potential. Tesla's energy business is expected to contribute to the company's profitability in the future.