Photo: Tesla
After Tesla reported disappointing production and delivery numbers for the first quarter, people expected the financial data to show a similar disaster. Although the first quarter marked a significant decrease in total revenue, Tesla held up better than most analysts estimated. This made Tesla shares jump more than 10% in the hours following the earnings call.
Tesla didn't have a very good first quarter, as revealed last month by the lower-than-expected delivery numbers. Tesla explained that the decrease was caused by a difficult Model 3 production ramp-up at Fremont, disruptions caused by the Red Sea conflict, and a terrorist attack at Giga Berlin. However, this didn't explain why Tesla ended the quarter with a large gap between production and deliveries, with more than 46,000 EVs added to its inventory.
The financial data reported on Tuesday confirmed that Tesla took a hit in the first quarter. The EV maker was forced to dig deep into its coffers to finance its massive investments in AI infrastructure, production capacity, Supercharger and service networks, and new product infrastructure. With $2.8 billion in capital expenditures, Tesla ended the quarter with $2.5 billion less in its cash reserves.
However, things are not that bad, despite a drop of 55% in net income to $1.1 billion. Revenue dropped 9% year over year to $21.3 billion as deliveries slid worldwide. Gross margin also fell to 17.4 percent in the first quarter from 19.3 percent in 2023. Besides the production woes highlighted above, the decline was mostly driven by a reduction in the average selling price (ASP) of vehicles and higher operational costs.
While the S3XY models were mostly responsible for the shrinking revenue, the Cybertruck was one of the highlights of the earnings call. The production ramp-up is going well, with Tesla confirming that it produced over 1,000 units per week in April. That's an important milestone, projecting the Cybertruck as the likely segment leader in 2024. The 4680 cell production ramp is also ahead of the Cybertruck ramp while production costs continue to improve.
While many consider Tesla to be an automotive company, it has several profit centers, and one of the brightest spots of the first-quarter earnings call was the energy sector. Tesla's energy storage deployment reached a record 4.1 GWh in the first quarter, with Energy Generation and Storage revenue growing 7% year over year (YoY). Gross profit was up 140% YoY, driven by increased Megapack deployments. This makes Energy Generation and Storage Tesla's highest-margin business. Tesla also highlighted higher FSD revenue due to the release of the Autopark feature in North America.
Although the numbers were down, the investors reacted positively to Tesla's plans, especially those concerning the AI infrastructure and future models. Tesla shares rose more than 10% in the hours following the earnings call, which was unusual. Despite positive numbers, Tesla share prices dropped after the earnings call for the past few quarters. This time, they inched higher after reporting declining financials, surprising people who expected them to crash even lower.
The financial data reported on Tuesday confirmed that Tesla took a hit in the first quarter. The EV maker was forced to dig deep into its coffers to finance its massive investments in AI infrastructure, production capacity, Supercharger and service networks, and new product infrastructure. With $2.8 billion in capital expenditures, Tesla ended the quarter with $2.5 billion less in its cash reserves.
However, things are not that bad, despite a drop of 55% in net income to $1.1 billion. Revenue dropped 9% year over year to $21.3 billion as deliveries slid worldwide. Gross margin also fell to 17.4 percent in the first quarter from 19.3 percent in 2023. Besides the production woes highlighted above, the decline was mostly driven by a reduction in the average selling price (ASP) of vehicles and higher operational costs.
While the S3XY models were mostly responsible for the shrinking revenue, the Cybertruck was one of the highlights of the earnings call. The production ramp-up is going well, with Tesla confirming that it produced over 1,000 units per week in April. That's an important milestone, projecting the Cybertruck as the likely segment leader in 2024. The 4680 cell production ramp is also ahead of the Cybertruck ramp while production costs continue to improve.
While many consider Tesla to be an automotive company, it has several profit centers, and one of the brightest spots of the first-quarter earnings call was the energy sector. Tesla's energy storage deployment reached a record 4.1 GWh in the first quarter, with Energy Generation and Storage revenue growing 7% year over year (YoY). Gross profit was up 140% YoY, driven by increased Megapack deployments. This makes Energy Generation and Storage Tesla's highest-margin business. Tesla also highlighted higher FSD revenue due to the release of the Autopark feature in North America.
Although the numbers were down, the investors reacted positively to Tesla's plans, especially those concerning the AI infrastructure and future models. Tesla shares rose more than 10% in the hours following the earnings call, which was unusual. Despite positive numbers, Tesla share prices dropped after the earnings call for the past few quarters. This time, they inched higher after reporting declining financials, surprising people who expected them to crash even lower.
Q1 2024 Shareholder Update → https://t.co/sXBSeLibSL
— Tesla (@Tesla) April 23, 2024
— Highlights
While many are pulling back on their investments in EVs, we are investing in future growth. This includes our AI programs, production capacity, Supercharger & service networks as well as new products… pic.twitter.com/dfXSCWuVDy
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