CoachTerry
Well-known member
- First Name
- Terry
- Joined
- Feb 10, 2023
- Threads
- 20
- Messages
- 63
- Reaction score
- 84
- Location
- Chevy Chase, MD
- Vehicles
- Cybertruck
- Occupation
- Wellness Coach
- Thread starter
- #1
https://apple.news/Ant4hGV-wThWNh6Q4DoBUlQ
By Rebecca Elliott
Tesla’s Musk Warns of Cybertruck Challenges
EV maker reports bigger-than-expected drop in third-quarter profits
Chief Executive Elon Musk warned Wednesday that Tesla would face “enormous challenges” scaling up factory production of its long-delayed Cybertruck, signaling profits could remain under pressure in the coming quarters.
The electric-car maker reported a 44% decline in third quarter net income Wednesday, a steeper drop than Wall Street had expected, as price cuts across the company’s lineup continued to take a toll on the bottom line.
On Tesla’s earnings call, Musk struck a cautious tone about the year ahead, expressing concerns about the broader economy, including higher interest rates and their impact on consumers.
He also was tempered in his outlook for the Cybertruck, which Tesla plans to start delivering to customers at the end of November.
Because of the difficulties of the truck’s design, Musk said, it could take another year to 18 months for it to be a significant contributor to positive cash flow.
“We dug our own grave with Cybertruck,” Musk said, referring to the complexity of building the vehicle, which has faced cost overruns and design changes.
Tesla’s third-quarter financial results disappointed on a number of fronts, including missing analysts’ expectations on revenue and net income, adding to concerns about whether the company can sustain its growth trajectory with a rather limited lineup.
The Texas-based automaker has leaned heavily on price cuts and discounts to stimulate demand for its aging models, some of which have only had minor refreshes in recent years. Starting prices in the U.S. for some Tesla vehicles have fallen by about a third this year, and the tactic has dented profitability.
In the third quarter, the automaker’s once industry-leading operating margin fell to 7.6% in the third quarter, from 17.2% in the year prior, putting it on par with many traditional automakers.
Tesla’s stock, which closed Wednesday at $242.68 a share, was down roughly 4% in after-hours trading.
First unveiled in 2019, the Cybertruck is Tesla’s first new passenger model in more than three years and the only new offering expected to hit the market soon. More than one million people have reserved a truck, Musk said. He added that Tesla expects to eventually produce 250,000 Cybertrucks a year, but not until 2025 at the earliest.
On Wednesday, Tesla reaffirmed its goal of delivering 1.8 million vehicles to customers this year, up from 1.3 million in 2022, but Tesla executives demurred when asked about growth plans for next year. The company has been aiming to increase vehicle sales by an average of 50% a year.
“It is not possible to have a compound growth rate of 50% forever or you will exceed the mass of the known universe,” Musk said.
He also was circumspect when discussing Tesla’s planned factory in Mexico, saying he is hesitant to “go full tilt” on the project. “I don’t want to be going at top speed into uncertainty,” he said after expressing concern about the global economy.
After several years of breakneck growth, Tesla is confronting a more challenging environment ahead. Old and new rivals are piling into the EV space, while many buyers are hesitant about making the switch to the more expensive technology, especially with interest rates rising.
Industrywide, U.S. sales of electric vehicles continue to increase, but at a slower clip than in years past, and unsold inventory is starting to stack up. Some automakers, such as General Motors and Ford Motor, are bridling their expectations, as the pool of consumers willing to splurge on an EV becomes more limited and prices overall come down.
SHARE YOUR THOUGHTS
What’s your outlook on Tesla? Join the conversation below.
To comment, you’ll need to be on WSJ.com
I n China, Tesla’s growth has been further challenged by an intensifying price war in the EV market and the rise of BYD, a competitor that is closing in on Tesla’s EV sales crown.
The company’s closely watched automotive gross margin, excluding regulatory credits, fell more than expected, to 16.3% in the July-to-September period. That margin, an indicator of the cost of sales, was 26.8% in the third quarter of 2022.
Musk has sought to reassure investors by arguing that Tesla’s future is in software, including autonomous driving technology that he expects will eventually help generate generous profits.
NEWSLETTER SIGN-UP
Technology
A weekly digest of tech reviews, headlines, columns and your questions answered by WSJ's Personal Tech gurus.
T esla’s stock has roughly doubled in 2023 after a disappointing 2022 but remains below its highs from two years ago.
The company will need to deliver more than 475,000 cars and SUVs in the final three months of 2023 to achieve its 1.8 million-vehicle sales goal this year.
Tesla’s price reductions have continued into October for the Model 3 car and Model Y crossover, and analysts anticipate the automotive gross margin will fall further in the fourth quarter.
Teslas sold for an average of around $44,000 in the third quarter, compared with about $54,000 in the same period of 2022.
Write to Rebecca Elliott at [email protected]
Elon Musk Inc.
More coverage of the billionaire entrepreneur and his businesses, selected by editors
Elon Musk Is Planning a Texas Utopia—His Own Town
Excerpt: The Real Story of Musk's Twitter Takeover
A Rare Look Into SpaceX's Finances
What if Tesla Is…Just a Car Company?
Behind Elon Musk’s Management Philosophy
Tesla's Cybertruck to Face Test
Musk’s Latest Mission: Rev Up the Electricity Industry
Can Twitter's Odd Couple Make It Work?
By Rebecca Elliott
Tesla’s Musk Warns of Cybertruck Challenges
EV maker reports bigger-than-expected drop in third-quarter profits
Chief Executive Elon Musk warned Wednesday that Tesla would face “enormous challenges” scaling up factory production of its long-delayed Cybertruck, signaling profits could remain under pressure in the coming quarters.
The electric-car maker reported a 44% decline in third quarter net income Wednesday, a steeper drop than Wall Street had expected, as price cuts across the company’s lineup continued to take a toll on the bottom line.
On Tesla’s earnings call, Musk struck a cautious tone about the year ahead, expressing concerns about the broader economy, including higher interest rates and their impact on consumers.
He also was tempered in his outlook for the Cybertruck, which Tesla plans to start delivering to customers at the end of November.
Because of the difficulties of the truck’s design, Musk said, it could take another year to 18 months for it to be a significant contributor to positive cash flow.
“We dug our own grave with Cybertruck,” Musk said, referring to the complexity of building the vehicle, which has faced cost overruns and design changes.
Tesla’s third-quarter financial results disappointed on a number of fronts, including missing analysts’ expectations on revenue and net income, adding to concerns about whether the company can sustain its growth trajectory with a rather limited lineup.
The Texas-based automaker has leaned heavily on price cuts and discounts to stimulate demand for its aging models, some of which have only had minor refreshes in recent years. Starting prices in the U.S. for some Tesla vehicles have fallen by about a third this year, and the tactic has dented profitability.
In the third quarter, the automaker’s once industry-leading operating margin fell to 7.6% in the third quarter, from 17.2% in the year prior, putting it on par with many traditional automakers.
Tesla’s stock, which closed Wednesday at $242.68 a share, was down roughly 4% in after-hours trading.
First unveiled in 2019, the Cybertruck is Tesla’s first new passenger model in more than three years and the only new offering expected to hit the market soon. More than one million people have reserved a truck, Musk said. He added that Tesla expects to eventually produce 250,000 Cybertrucks a year, but not until 2025 at the earliest.
On Wednesday, Tesla reaffirmed its goal of delivering 1.8 million vehicles to customers this year, up from 1.3 million in 2022, but Tesla executives demurred when asked about growth plans for next year. The company has been aiming to increase vehicle sales by an average of 50% a year.
“It is not possible to have a compound growth rate of 50% forever or you will exceed the mass of the known universe,” Musk said.
He also was circumspect when discussing Tesla’s planned factory in Mexico, saying he is hesitant to “go full tilt” on the project. “I don’t want to be going at top speed into uncertainty,” he said after expressing concern about the global economy.
After several years of breakneck growth, Tesla is confronting a more challenging environment ahead. Old and new rivals are piling into the EV space, while many buyers are hesitant about making the switch to the more expensive technology, especially with interest rates rising.
Industrywide, U.S. sales of electric vehicles continue to increase, but at a slower clip than in years past, and unsold inventory is starting to stack up. Some automakers, such as General Motors and Ford Motor, are bridling their expectations, as the pool of consumers willing to splurge on an EV becomes more limited and prices overall come down.
SHARE YOUR THOUGHTS
What’s your outlook on Tesla? Join the conversation below.
To comment, you’ll need to be on WSJ.com
I n China, Tesla’s growth has been further challenged by an intensifying price war in the EV market and the rise of BYD, a competitor that is closing in on Tesla’s EV sales crown.
The company’s closely watched automotive gross margin, excluding regulatory credits, fell more than expected, to 16.3% in the July-to-September period. That margin, an indicator of the cost of sales, was 26.8% in the third quarter of 2022.
Musk has sought to reassure investors by arguing that Tesla’s future is in software, including autonomous driving technology that he expects will eventually help generate generous profits.
NEWSLETTER SIGN-UP
Technology
A weekly digest of tech reviews, headlines, columns and your questions answered by WSJ's Personal Tech gurus.
T esla’s stock has roughly doubled in 2023 after a disappointing 2022 but remains below its highs from two years ago.
The company will need to deliver more than 475,000 cars and SUVs in the final three months of 2023 to achieve its 1.8 million-vehicle sales goal this year.
Tesla’s price reductions have continued into October for the Model 3 car and Model Y crossover, and analysts anticipate the automotive gross margin will fall further in the fourth quarter.
Teslas sold for an average of around $44,000 in the third quarter, compared with about $54,000 in the same period of 2022.
Write to Rebecca Elliott at [email protected]
Elon Musk Inc.
More coverage of the billionaire entrepreneur and his businesses, selected by editors
Elon Musk Is Planning a Texas Utopia—His Own Town
Excerpt: The Real Story of Musk's Twitter Takeover
A Rare Look Into SpaceX's Finances
What if Tesla Is…Just a Car Company?
Behind Elon Musk’s Management Philosophy
Tesla's Cybertruck to Face Test
Musk’s Latest Mission: Rev Up the Electricity Industry
Can Twitter's Odd Couple Make It Work?
Sponsored
q3-2023-results-livestream-
-complete-recap-inside.9520/
