Tesla Q2 Earnings: Poor Margins driving Tesla share price lower?
Tesla Q2 Results: Key Takeaways
- Tesla’s Q2 revenue rose 47% to $24.92 billion from a year ago, marginally above analyst expectations of $24.47 billion.
- The total vehicle production and the total vehicle delivery saw an impressive 86% and 83% growth year-on-year, respectively.
- The company reported a quarterly net income of $2.70 billion, approximately 20% higher than the corresponding quarter in the previous year.
- Operating margins fell 5% due to cost reductions.
The electric vehicle giant, Tesla, continues to shake the auto industry with its Q2 earnings report. The company reported an impressive $2.7 billion net income compared to $2.25 billion the previous year. However, Tesla shares price fell 6.44% in early trading on July 20. IST post-announcement because the investors were disappointed about bottomed margins.
Tesla's price cuts have undeniably spurred demand, contributing to higher sales volume. The company reported an increase of 46% in total automotive revenues. Tesla also saw a rise of 74% in energy generation and storage revenue.
Producing a record number of vehicles, Tesla’s top-selling cars - Model 3/Y and Model S/X - saw a jump of 90% and 19% in the units produced, respectively, in the US, Chinese and European markets.
In order to cement its position as the market leader in all these key markets, Tesla is bearing massive discount costs, which significantly impacted its operating margins, pushing them from 14.6% to 9.6% in this quarter.
Tesla Q2 Earnings: Historical Share Performance
| 1 Day | 1 Month | 1 Year | 5 Years |
|---|---|---|---|
| -0.71% | +6.12% | +17.68% | +1292.92% |
(Data as on July 20, 2023)
Decoding Tesla Q2 Earnings
Tesla Q2 Revenue
Tesla’s Q2 revenue rose 47% to $24.9 billion from a year ago, marginally above analyst expectations of $24.47 billion.
Tesla saw a 222% YoY increase in energy storage deployments, reaching 3.7 GWh. This growth was driven by the ongoing ramp-up of the first dedicated Megapack factory in Lathrop, CA. The 40 GWh Megafactory is successfully scaling up production and has room to reach full capacity.
| Q2 2023 | Q2 2022 | YoY % change |
| $24.90 billion | $16.90 billion | 47.34% |
Tesla Q2 Net Profit
The company reported quarterly net income of $2.70 billion, 20% higher than the corresponding quarter in the previous year.
| Q2 2023 | Q2 2022 | YoY % change |
| $2.7 billion | $2,25 billion | 20% |
Tesla Q2 Earnings: Vehicle Sales/Deliveries
Tesla delivered 466,140 vehicles during the quarter ended June 2023, 83.02% higher than the corresponding quarter last year.
Tesla Dividend
Tesla's board did not release any dividends for the quarter.
Tesla Q2: Analyst View
- Citigroup has a 'neutral' rating on Tesla with a share price target of $279.
- Canaccord Genuity has a ‘buy’ call with a target price of $293. The broker expects a durable, compounding growth by continuing to invest in Cybertruck, AI/AV, robotics and batteries.
- Barclays has a ‘neutral’ rating on Tesla with a share price target of $260.