Vehicle price reductions continued to affect Tesla's margins in the second quarter of this year while it reached record production and deliveries. At an earnings call on July 19, Tesla CEO Elon Musk said the company is willing to license its Full Self-Driving to other carmakers.
The US-based EV giant released its financial results for the second quarter of 2023 on Wednesday.
Highlights of Tesla 2Q 2023 results | ||
Item | Result (US$ billion) | YoY change (%) |
Total revenues | 24.93 | 47 |
Automotive revenues | 21.27 | 46 |
Total gross profit | 4.53 | 7 |
Gross margin (%) | 18.2 | -682bp |
Income from operations | 2.4 | -3 |
Operating margin (%) | 9.6 | -493 bp |
Net income | 2.7 | 20 |
Source: Tesla, compiled by DIGITIMES Asia, July 2023
Tesla enjoyed increases of over 80% both in production and deliveries from April to June this year, boosting its revenues to almost US$25 billion. Musk said while the company keeps targeting 1.8 million in 2023, production will decrease slightly in the third quarter due to some factory upgrades.
Tesla saw its operating margin continue to go down in the second quarter. Besides the price cuts in the first and early second quarter, the operating income was also impacted by costs of 4680 cell production ramp-up, increased operating expenses driven by Cybertrucks and other factors.
Source: Tesla, compiled by DIGITIMES Asia, July 2023
During the earnings call, a Tesla executive said the 4680 battery cell production at the Texas plant increased by 80% from the first to the second quarter of 2023. The company also managed to cut the production cost of the cell by a quarter.
According to Tesla, it is expected to receive US$150 million to US$250 million of manufacturing incentives each quarter in 2023, offered by the Inflation Reduction Act (IRA). The incentives will include a 50-50 sharing of credits for qualified cells from Panasonic, its battery partner.
Tesla has welcomed a group of car OEMs and charging service operators to adopt its North America Charging Standard since May. Musk said on Wednesday that the company is also more than happy to license its FSD software and hardware to other car companies.
He added that Tesla has been in early discussion with a major OEM about using the Tesla FSD.
The EV company also said it had started producing its Dojo training computers this month. Tesla sees the computers as an essential element to realize faster and cheaper neutral net training, which will enable vehicle autonomy at scale.
