Tesla hits $25B in Q2 revenue – As reported on Wednesday, Tesla’s income has jumped as it records a net income of $2.7 billion in the second quarter, a 20% increase over the same period last year as once again, the company’s EV price cuts have once again eaten into profits.
In the United States, Mexico, Europe, and China, the automaker has continually decreased the price of its four EV models. The change aided sales in the first half of the year, with Tesla delivering a record 466,140 cars in the second quarter. However, it has eaten into Tesla’s traditionally high and mostly healthy automotive margins.
Tesla’s gross margins fell to 18.2% for the second time this year, from 25% in Q2 2022 to 19.3% last quarter.
Tesla met Wall Street revenue projections of about $25 billion for the quarter, which is nearly 50% higher than sales of $16.9 billion in the previous year. The majority of the revenue came from Tesla’s automotive revenue, which totaled $21.3 billion in the second quarter. This figure includes $282 million in federal tax breaks.
Tesla’s Q2 revenue included a modest but significant portion of “services and other revenue,” which typically comprises after-sales vehicle servicing and parts, retail products, vehicle insurance, and the Supercharger network.
In the second quarter, Tesla expanded the number of Supercharger stations and connectors by 33%, to 5,265 and 48,082, respectively. In recent months, the manufacturer has been expanding its network of Superchargers to include Ford, General Motors, and, most recently, Nissan. While charging isn’t Tesla’s main source of revenue, it’s probable that some of the rise is due to Tesla expanding its charging network.
Revenue from energy generation and storage was constant quarter over quarter but increased 74% year over year.
Tesla’s operating margin dropped marginally in the second quarter, from 11.4% in the first to 9.6% in the second. Its capital expenditures were steady QoQ but up 19% year on year. The business claimed $2 billion in capital expenditures, most likely due to continuous production scaling at the automaker’s gigafactories in Berlin and Texas. According to Tesla’s Q2 earnings, Berlin’s vehicle capacity climbed by 25,000 units over the Q1 reported numbers.
Tesla ended the quarter with $1 billion in free cash flow, up from $441 million at the end of the first quarter.
On Wednesday, Tesla stock closed at $291.26, down 5% in after-hours trading.
Tesla’s Forecast for 2023
The full-year outlook hasn’t changed for Tesla.
“For 2023, we expect to remain ahead of the long-term 50% CAGR with around 1.8 million vehicles for the year,” reads Tesla’s earnings report.
Tesla delivered 422,875 automobiles worldwide in the first quarter. This figure increased by 10% to 466,140 units in the second quarter. If Tesla’s production and delivery capabilities continue to grow at the current rate, the company will be able to achieve over 2 billion units by the end of the year.
Musk did, however, remark on Wednesday that Q3 output will be somewhat lower due to planned downtime for facility upgrades. He stated that macroeconomic conditions are unclear and could have an immediate favorable or negative influence on execution.
Musk also defended Tesla’s numerous price cuts, claiming that they were meant to offset the possibility of fewer sales due to economic uncertainties.
“When interest rates rise dramatically, we actually have to reduce the price of the car because the interest payments increase the price of the car,” said Musk.
Also, as noted by the executive, in an effort to boost sales, Tesla had also brought back its referral program.
Information o Cybertruck still lacking
Tesla completed its long-awaited Cybertruck over the weekend at Giga Austin, although few information were revealed at the time. During the company’s results release on Wednesday, investors and analysts were left wanting more.
“It’s always very difficult to predict the ramp initially, but I think we’ll be making them in high volume next year, and we will be delivering the car this year,” said CEO Elon Musk Wednesday.
Musk also stated that “demand is so far off the hook, you can’t even see the hook,” underlining that the Cybertruck is equipped with “a lot of new technology…so the production ramp will move as fast as the slowest and least likely elements of the entire supply chain.”
Tesla did not disclose any other details about the Cybertruck, such as production capacity for next year, cost, or additional specifications.