{"id":47869,"date":"2023-04-20T11:19:03","date_gmt":"2023-04-20T15:19:03","guid":{"rendered":"http:\/\/autosector.com\/?p=47869"},"modified":"2023-04-20T11:19:03","modified_gmt":"2023-04-20T15:19:03","slug":"tesla-tsla-crashes-despite-strong-earnings-credibility-going-away","status":"publish","type":"post","link":"http:\/\/autosector.com\/?p=47869","title":{"rendered":"Tesla (TSLA) crashes despite strong earnings; is the credibility going away?"},"content":{"rendered":"
\n\t\t\"tesla<\/p>\n<\/figure>\n

Tesla\u2019s stock (TSLA) crashed 7% today following earnings that actually met expectations. So what is the problem? Is Tesla losing its credibility?<\/p>\n

<\/p>\n

Yesterday, Tesla released\u00a0its Q1 2023 financial results<\/a> and met earnings expectations of $0.85 per share and even surprised many by maintaining an automotive gross margin over 19% despite significant price cuts during the quarter. <\/p>\n

Tesla was still able to deliver an operating margin of 11% during the quarter and added hundreds of millions to its cash position.<\/p>\n

\"\"<\/figure>\n

Tesla\u2019s costs have also improved this quarter, and the automaker shows room to be able to absorb the new price cuts that were implemented after the end of the last quarter.<\/p>\n

That\u2019s why it\u2019s surprising to see the stock crashing 7% this morning after the market opened. What is happening?<\/p>\n

Electrek\u2019s Take<\/h2>\n

Obviously, I don\u2019t know for a fact, but I have my suspicions. I think Tesla might be losing some credibility here.<\/p>\n

Many Tesla fans were holding on to the idea that Tesla was reducing prices to start a price war and not because it needed to create demand. These results and the automaker\u2019s comments yesterday confirmed what most people knew to be true: Tesla needed to reduce the price to create enough demand to match its production. Period.<\/p>\n

But at the same time, the automaker tried to explain its pricing strategy <\/a>by claiming that it is banking on achieving higher profits on the vehicles it is selling right now at lower gross margins by making them self-driving and selling future software features and subscriptions.<\/p>\n

I think that\u2019s where it is losing credibility.<\/p>\n

Musk seems to believe that people don\u2019t understand the value that Tesla can create by making its electric vehicle self-driving<\/a>.<\/p>\n

The truth is that everyone understands the value, but fewer and fewer people are starting to believe that Tesla can deliver on its full self-driving promises. That\u2019s the issue.<\/p>\n

Tesla had a significant rise in stock price because it was selling more electric vehicles than anyone at a higher gross margin than anyone.<\/p>\n

Now this is still true, but the latter is starting to become less accurate. That\u2019s it.<\/p>\n

It pushes people to have more concerns about Tesla\u2019s demand. However, to be fair, I think the bulk of Tesla\u2019s demand issues leading to those price cuts are mostly not Tesla\u2019s fault. The high interest rates and economic uncertainty are certainly the biggest factors leading people to postpone new car purchases.<\/p>\n

Therefore, if we see a turn around in those factors, I think Tesla will see strong demand again and won\u2019t need to cut prices further, but the problem is that those are factors entirely out of Tesla\u2019s control.<\/p>\n

\n

FTC: We use income earning auto affiliate links.<\/em> More.<\/a><\/p>\n

<\/div>\n","protected":false},"excerpt":{"rendered":"

Tesla\u2019s stock (TSLA) crashed 7% today following earnings that actually met expectations. So what is the problem? Is Tesla losing its credibility? Yesterday, Tesla released\u00a0its Q1 2023 financial results and met earnings expectations of $0.85 per share and even surprised many by maintaining an automotive gross margin over 19% despite significant price cuts during the […]<\/p>\n","protected":false},"author":1,"featured_media":8313,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[4],"tags":[],"class_list":["post-47869","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-e-cars"],"_links":{"self":[{"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/posts\/47869","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=47869"}],"version-history":[{"count":0,"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/posts\/47869\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/media\/8313"}],"wp:attachment":[{"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=47869"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=47869"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=47869"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}