A sign marks the location of a Tesla dealership in Schaumburg, Illinois, on Wednesday, April 19, 2023. – AFPpicTesla on Wednesday reported a drop in first-quarter earnings as price cuts at Elon Musk’s electric vehicle company boosted demand but hit profit margins.
Shares fell on the results, which were in line with Wall Street expectations for earnings per share, but showed a lower profit margin than expected. Investors who are bullish on Tesla’s strategy see the price cuts as a way to grow its market share at a time when rivals are also ramping up production amid cost pressures.
“As many carmakers are working through challenges with the unit economics of their EV programmes, we aim to leverage our position as a cost leader,” Tesla’s press release said.