Tesla Phone Meeting: Sales > Profit Margin! Expected to Deliver 2 Million Vehicles This Year!

After Tesla released its first financial report following a global price cut, the market was most concerned about the gross profit margin, which did indeed cause a shock, and the stock price fell sharply after hours.

Specifically, "Tesla's first-quarter profit plummeted 21% year-on-year; the gross profit margin of its core automotive business was 21.1%, lower than the 25.9% in the fourth quarter of last year and the 32.9% in the first quarter of last year, continuing to hit a two-year low; the gross profit margin of car sales without regulatory credits was only 18.3%, significantly lower than the market's expectation of more than 20%."

Although revenue grew by more than 20% year-on-year, the sharp drop in profit still made it difficult for investors to accept. After hours, Tesla's stock price fell more than 6%.

It is worth noting that unlike Netflix, whose stock price "rose from the dead" after executives' excellent performance on the earnings call yesterday, Tesla's earnings call did not save its after-hours stock price and even caused it to fall further. What happened?

Profit? Sales!

After the price cut caused Tesla's quarterly profit and gross profit margin to plummet, investors' most pressing concern was naturally: "Will there be further price cuts? What about profit margins if there are more cuts?"

In response, Tesla stated that it believes "Tesla's operating profit margin is still the highest in the industry, and it will continue to adjust product pricing and pursue sales rather than profit margins in the future."

Tesla also revealed that since the recent round of price cuts, "global orders have exceeded production." "From a production standpoint, if everything goes smoothly, Tesla's deliveries are expected to reach 2 million vehicles this year," a figure that exceeds the previous expectation of 1.8 million vehicles.

Tesla even stated that "vehicle costs are decreasing, and Tesla can now sell cars with 0% profit and then recover profits in the future through autonomous driving and other businesses, which other car manufacturers cannot do."

Tesla's CFO, Zachary Kirkhorn, further stated that Tesla evaluates car prices on a weekly basis.

He also explained to investors that the overall profit margin of cars in the first quarter was affected by changes in vehicle pricing plans, warranty changes, and reduced revenue from some Autopilot features.

But he also reminded investors: "Don't focus too much on the short term, because Tesla usually adopts a long-term strategy. To some extent, the level of gross profit margin will only affect Tesla's investment strategy in the next few years."

Progress outside of cars is going smoothly

As for the Tesla pickup truck that retail investors are very concerned about, Tesla did not give the pricing and production information for this new vehicle on the spot, only saying that it will be revealed when it is delivered in the third quarter. Tesla also has its energy business, and the company has joked that "from the perspective of deployed kilowatt hours, the scale is indeed larger than the automotive business," and its growth is in line with expectations.

At the same time, Tesla remains very optimistic about its fully self-driving (FSD) technology, believing that "the trend of fully autonomous driving is very clear," that "the value of autonomous driving cars is huge," and that "we are now moving forward in twists and turns." Although Tesla believes that it has a chance to "get it done this year," it should be noted that the company has made similar claims almost every year, so its credibility is questionable.

In addition, analysts asked about the progress of Tesla's Dojo supercomputer program, to which the company responded that "Dojo has the potential to be worth billions of dollars," and that "this risky bet could bring huge returns."