Tesla Earnings Reveal: Two Important Things the Media Missed
Tesla’s earnings reveal within the last 24 hours has caused quite a stir in the market. While Tesla’s share price has tanked sharply, there are two significant things mentioned in the report that the media just didn’t seem to notice. These two points deal with the cost of Tesla’s cars in the future and the cost of manufacturing them in the future.
As an investor in Tesla, the recent drop in share price doesn’t faze me. I see this as a good buying opportunity. The report’s earnings results were surprisingly positive, which I hadn’t expected. Despite reducing its prices over the last three months, Tesla still managed to generate positive results.
Let’s take a closer look at the details of the report and Tesla’s strategy moving forward.
Earnings Results
According to the report, Tesla’s revenue was 23.3 billion, and non-gaap gross margins were 19.3 percent in the first quarter of last year. Though these numbers were down from the same quarter last year, they weren’t down nearly as much as many had expected.
Tesla’s first three months of the year resulted in the production of 440,808 vehicles, with 423,000 of them delivered. This includes the Chinese New Year and the shorter month of February, making it a very impressive result.
Earnings per share for the first quarter of 2021 was 85 cents per share, in line with Wall Street estimates. Although automotive revenue was 19.96 billion, it made up the majority of Tesla’s revenue this quarter. Tesla’s long-term view is that its product pricing will continue to evolve upwards or downwards, depending on several factors.
Tesla’s Pricing Strategy
Tesla’s pricing strategy seems to be the key focus of this year’s quarterly results. The company intends to leverage its position as a cost leader and consider its long-term view of per-vehicle profitability. They expect that their product pricing will continue to evolve in the future, depending on several factors.
While most of the automotive sector is struggling with the cost of their EV programs, Tesla seems to be making a profit. Tesla remains focused on operating leverage as it scales and tries to put pressure on its competition to improve cost efficiency.
Tesla’s focus on cost reduction means that the company will likely reduce the price of their EVs further. However, once they launch new models, prices will probably go back up. Tesla expects to see new technologies and improved vehicles in the future, leading to increased demand for its cars.
Conclusion
In conclusion, despite Tesla’s share prices tumbling in aftermarket trading, the results of the report were surprisingly positive. Tesla’s focus on cost reduction means that their EVs will likely become even more affordable in the future. Investors should see this as a buying opportunity, as Tesla’s stock price may rise by the end of the year.
Tesla’s strategy is to remain a cost leader and put pressure on other automakers to improve cost efficiency, ultimately driving down the price of EVs for everyone. While Tesla’s pricing strategy may continue to fluctuate, as an investor, I’m confident that Tesla’s long-term prospects look bright.