Connect with us

Published

on

Tesla has just released its Q1 2023 earnings report amidst several price drops since the beginning of the year. This left investors questioning how these drops would affect margins, and Tesla has an explanation, but it’s perhaps only a partial one.

In a nod to the question on everyone’s lips, Tesla’s earnings report starts off immediately with a couple of paragraphs intended to address the effect of these price drops on its industry-high margins.

In the current macroeconomic environment, we see this year as a unique opportunity for Tesla. As many carmakers are working through challenges with the unit economics of their EV programs, we aim to leverage our position as a cost leader. We are focused on rapidly growing production, investments in autonomy and vehicle software, and remaining on track with our growth investments.

Although we implemented price reductions on many vehicle models across regions in the first quarter, our operating margins reduced at a manageable rate. We expect ongoing cost reduction of our vehicles, including improved production efficiency at our newest factories and lower logistics costs, and remain focused on operating leverage as we scale.

Tesla is pointing out that since its EV volume is so drastically higher than every other automaker’s, it can build cars at a lower cost than the competition.

And indeed, after yesterday’s price drops and other even larger price drops earlier this year, Tesla has gone from being near the top of the EV price range to near the bottom. Last year, Tesla repeatedly hiked prices while the industry faced supply challenges and EV demand well exceeded supply.

After tax credits, the base Model Y is now under $40k, while many electric SUVs have higher starting prices. And the base Model 3 is now available for $40k before credits are taken into account, though it now only qualifies for $3,750 due to the IRS’ new battery guidelines.

Tesla points out that these cuts reduced its margins but says that this margin reduction happened at a “manageable rate.” In Q1 last year, Tesla’s operating margin was 19.2%, and this year it’s 11.4%, a drop of 779 basis points.

This is a big chunk, cutting operating margins almost in half – and note that there have been further price cuts, both in the US and elsewhere, since the end of the quarter. So we could expect average selling prices to go down further in next quarter’s earnings and perhaps another cut to margins.

That said, Tesla is still planning to grow production at a CAGR of 50%, guiding for 1.8 million deliveries next year (about 31% growth from last year’s 1.37 million production). Tesla says it would rather focus on high volume and lower margins.

And it should be noted that higher volume also displaces more gas vehicles, which is better for the environment and public health.

There are other reasons for these price drops. For one, costs have come down, particularly with a massive global drop in the costs of resources like lithium after last year’s massive global spike. Also, as Tesla CEO Elon Musk has pointed out, rising interest rates have made it more expensive to get a loan on a car, which means Tesla has had to lower prices to make purchases seem more attractive (this is a case study in how rising interest rates can lower inflation).

But Tesla claims these margin cuts are manageable, and not only that, the company is taking a long-term view:

Our near-term pricing strategy considers a long-term view on per vehicle profitability given the potential lifetime value of a Tesla vehicle through autonomy, supercharging, connectivity and service. We expect that our product pricing will continue to evolve, upwards or downwards, depending on a number of factors.

Here, Tesla says that despite the vast majority of its revenue coming from sales of cars – in Q1, $19.9b came from cars and only $3.3b came from energy, services, and other – it feels confident that any losses in automotive sales revenue will be made up for in the long term by these other revenue categories.

Tesla currently sells access to its FSD Beta software for an eye-watering $15,000. This is an enormous chunk of change, particularly for a car that sells for $40k new. Tesla CEO Elon Musk has claimed that FSD has enormous value, though most who have used it recognize that it’s definitely not ready for primetime yet. Perhaps this is why timelines for its rollout keep getting pushed back. (Is it next year yet?)

Tesla also mentions Supercharging as a potential revenue center. Right now, Tesla doesn’t make a lot of money on Supercharging, but that may change very soon, as the company has started opening up Superchargers to other brands. Tesla used this opportunity to establish the “North American Charging Standard” using its connector, claiming that, since its connector is on the majority of cars and DC chargers in North America, other automakers should follow Tesla’s lead and use its plug.

This also opens the company up to the availability of billions of federal dollars earmarked for charger installation but which can only be used on chargers that are open to multiple brands of car. Until recently, only Teslas could use Superchargers, but now that they’re open to other cars, Tesla can presumably angle for some of those billions.

Finally, Tesla says that service could be a profit center, a big change from Musk’s original philosophy on the topic. Here’s a video from Tesla’s 2013 shareholder meeting, timestamped to 1:36 when his answer on service begins:

“Our philosophy with respect to service is not to make a profit on service. I think it’s terrible to make a profit on service.”

Clearly, things have changed since then, and Tesla is much larger and has different goals and considerations now than before. But in the context of discussing auto dealerships, with which Tesla is still in a battle, one would think that this overarching “philosophy” would not have changed with transient business conditions.

Nevertheless, this is one way in which Tesla could conceivably offer reduced upfront prices, with the hopes that the continual business of servicing vehicles in the field would help to shore up margins. Most other automakers don’t have this option since they don’t own their dealerships, but Tesla does, which gives it the flexibility to capture this portion of revenue. It sounds like the company now explicitly intends to seek this revenue after originally promising not to.

Electrek’s Take

But there’s another reason that Tesla doesn’t mention in its report: demand.

I know; we’ve heard it before. For the last decade, other automakers, media, incumbent industry, oil companies, captured regulators, and so on have all said that there just isn’t enough EV demand. We’ve called them wrong every time, and they’ve been wrong every time.

But specifically, here, we’re talking about demand solely for Tesla, after the huge price hikes that the company engaged in over the course of 2021 and 2022 and amid questionable public behavior by the CEO.

At the time when Tesla was raising prices, EV demand was very high, and EV supply was very low. This gave Tesla, the company with the most EV supply, significant pricing power.

Now, we still have high global EV demand, with many other brands selling out vehicles while gas cars go unsold. But in the US, we have an ever-changing tax credit environment, with some new rules going into place yesterday. This means there’s a lot of shifting happening in the industry, and it’s hard to predict which models will have the most demand as only some qualify for the tax credit (however, you can bypass most restrictions by leasing).

And while Tesla is mostly on the good side of this – its cars are now much lower in price, and most of them qualify for credits – it also has a ton of supply, is continuing to ramp quickly, and may be alienating potential customers.

Anecdotally (and in data), CEO Musk’s recent behavior related to the Twitter “dumpster fire” he keeps burning his money in has affected the company’s reputation. Musk says that TSLA shareholders will benefit in the long term from all the irrelevant nonsense he’s very publicly getting himself into, but we are not convinced.

So between high prices, erratic behavior from the CEO, and availability of other EV models, customers have perhaps looked elsewhere over the last year. As a result, Tesla’s inventory started to grow in a way that the company hasn’t ever really dealt with before, and it had to start pulling demand levers. It first did this with incentives, but this year has focused instead on large price drops.

Those price drops will definitely be able to bring some customers back, but it remains to be seen if some customers were permanently turned off by the high-profile behavior of the CEO.

FTC: We use income earning auto affiliate links. More.

Continue Reading

Environment

This Maryland county will get its power from a solar farm on landfill

Published

on

By

This Maryland county will get its power from a solar farm on landfill

Baltimore County, Maryland, just brought its first large-scale ground-mounted solar farm online, and it sits on what used to be the Parkton Landfill. The 213-acre site, once a symbol of waste, is now generating clean power that will cut costs, slash emissions, and turn an underused piece of land into a long-term energy asset.

Located north of Baltimore City, Baltimore County is one of Maryland’s largest and most populous counties, and its push toward renewables has major implications for the state’s climate and energy goals.

County Executive Kathy Klausmeier called the project a clear example of innovation meeting sustainability: “We are cutting costs for taxpayers and making investments that benefit our communities for decades.”

The new solar farm will provide around 11% of the Maryland county government’s annual electricity, producing roughly 8.2 million kilowatt-hours (kWh) in its first year. That’s the equivalent of avoiding greenhouse gas emissions from burning over 620,000 gallons of gasoline, powering more than 1,150 homes for a year, or driving 14 million fewer miles in gas cars, according to the EPA.

Advertisement – scroll for more content

The 7 MW system includes four large solar arrays of 15,000 ground-mounted photovoltaic panels. It’s part of a growing trend in the US to repurpose capped landfills for renewable energy, turning dormant properties into productive clean energy sites.

Through a power purchase agreement with TotalEnergies, which owns and operates the system, Baltimore County will lock in reduced electricity rates for 25 years, with options to extend the contract for up to 33 years. That long-term deal protects taxpayers from future electricity price hikes while advancing local climate goals.

“Adding another large source of solar electricity to power our County’s facilities reflects our community’s values of making smart investments that take care of the health of our community and environment,” said Greg Strella, the county’s chief sustainability officer.

TotalEnergies Managing Director Eric Potts called the project a “powerful example of transforming underutilized assets into productive resources,” pointing to the dual benefits of cutting emissions and saving money.

Baltimore County’s next landfill solar project, at Hernwood, is expected to come online by 2028. Once that system is up and running, renewables will supply about 55% of the county government’s electricity use.

Read more: The Trump administration just killed the US’s largest solar project


The 30% federal solar tax credit is ending this year. If you’ve ever considered going solar, now’s the time to act. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them. 

Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.

FTC: We use income earning auto affiliate links. More.

Continue Reading

Environment

The Hyundai IONIQ 3 looks just as wild as the concept [Video]

Published

on

By

The Hyundai IONIQ 3 looks just as wild as the concept [Video]

The IONIQ 3 was spotted in public rocking a wild new look, just like the Concept Three Hyundai revealed last month.

The Hyundai IONIQ 3 draws looks from the Concept Three

We got our first look at the IONIQ 3 just over a month ago after Hyundai revealed the Concept Three at the Munich Motor Show.

The concept will arrive as the IONIQ 3 when it launches next year. Production is set to begin in early 2026 at Hyundai’s manufacturing plant in Turkey with the first customer deliveries shortly after.

Hyundai’s Concept Three is a preview of the new EV, set to arrive as a little sibling to the IONIQ 5. Like the concept, the IONIQ 3 is bringing a radical new look to the IONIQ series, which Hyundai said will set the tone for its next wave of vehicles.

Advertisement – scroll for more content

The new design theme, dubbed “Art of Steel,” is inspired by advanced steel technology. It features an Aero Hatch profile that Hyundai calls “a new typology that reimagines the compact EV silhouette.”

Hyundai-IONIQ-3-looks
The Hyundai Concept THREE EV, a preview of the IONIQ 3 (Source: Hyundai)

The added lemon-tinted glass that wraps around the vehicle and wheels to match only adds to the electric hatch’s bold new look.

Hyundai kept a few design elements found on other IONIQ models, including its signature Parametric Pixel lights.

Hyundai-IONIq-3-looks
The Hyundai Concept THREE EV, a preview of the IONIQ 3 (Source: Hyundai)

With its official debut coming up, the IONIQ 3 was spotted driving in Korea with what appears to be a nearly identical design to the concept.

The video from HealerTV offers a closer look at Hyundai’s new EV from nearly all angles. Although it’s still covered, you can see the front headlights are about the same. The only noticeable difference is that the turn signal lights are now above the headlight.

As the reporter points out, if you look at the headlights, tail lights, and radiator grille, it appears just like the concept.

Like up front, the turn signal is above the rear taillight. It also features a brake assist light similar to the Nexo, Hyundai’s fuel cell electric vehicle (FCEV).

Hyundai-IONIQ-3-looks
The Hyundai Concept Three (Source: Hyundai)

Measuring 4,287 mm in length, 1,940 mm in width, and 1,428 mm in height, with a wheelbase of 2,722 mm, the Concept Three is about the size of the Volkswagen ID.3 and Kia EV3.

It will sit between the Inster EV and Kona Electric in Hyundai’s European lineup. Hyundai has yet to release prices, range, and other specs, but like the Kia EV3, it’s expected to be available with 58.3 kWh and 81.4 kWh battery packs, offering a WLTP range of around 365 miles.

Since the Kona Electric starts at £35,000 ($47,000), the IONIQ 3 will likely be priced closer to £25,000 ($33,700). For those in the US, the IONIQ is not expected to make the trip overseas.

However, Hyundai is still offering one of the most affordable EVs in the US with the 2026 IONIQ 5 starting at under $35,000.

FTC: We use income earning auto affiliate links. More.

Continue Reading

Environment

Hiboy launches TITAN & TITAN Pro e-scooters with up to $699 savings, Anker SOLIX F3000 station at new $1,399 low, more

Published

on

By

Hiboy launches TITAN & TITAN Pro e-scooters with up to 9 savings, Anker SOLIX F3000 station at new ,399 low, more

We’re closing out this week’s Green Deals with some more major savings, headlined by Hiboy’s new TITAN Electric Scooter and TITAN Pro Electric Scooter, which are launching with up to $699 in savings starting from $1,001. Right behind them is Anker’s SOLIX F3000 Portable Power Station (and bundles) that is getting its $1,399 Prime Day low extended, as well as Mammotion’s YUKA Mini 500H and 700H robot lawn mowers starting from a $649 low. We also have EcoFlow’s latest 48-hour flash sale, a handy device from Goal Zero, and many other ongoing Prime Day sales waiting for you below – with all the continuing event’s savings collected into our Post-Prime Day Green Deals hub here.

Head below for other New Green Deals we’ve found today and, of course, Electrek’s best EV buying and leasing deals. Also, check out the new Electrek Tesla Shop for the best deals on Tesla accessories.

Hiboy launches new TITAN and TITAN Pro e-scooters with an up to 80-mile range, now starting from $1,001 (Up to $699 off)

As part of Hiboy’s ongoing Better Than Prime Day Sale, the brand has launched two new e-scooters that bring some serious power to commutes and joyrides, complete with bonus savings. You can now hop on Hiboy’s TITAN Electric Scooter at $1,001 shippedafter using the code HST9 at checkout for an additional 9% off, while Hiboy’s TITAN Pro Electric Scooter is down at $1,350 shippedafter using the code HSTP10 at check out for an additional 10% off. These two new models will carry full $1,700 and $2,000 price tags once the initial launch savings end, making this deal all the more enticing. While things last, you’re looking at $699 and $650 markdowns that save you some serious cash on some seriously powerful rides, while also setting the bar for future discounts down the road. You’ll find both these deals coming several hundred dollars under the TITAN and TITAN Pro Amazon pricing.

With these two new releases, Hiboy is showing folks just how fast and wild their e-scooters can get, with many often falling into the more budget-friendly realm. Things start with Hiboy’s TITAN electric scooter that arrives in futuristic industrial style, equipped with a 750W (1,000W peaking) motor and 48V 18Ah battery that provides up to 46 miles of travel at up to 25 MPH top speeds. Among its many features, you’ll find a dual suspension system, dual hydraulic brakes, 10-inch gel-filled tubeless tires, a wider-than-normal deck, zero-start capabilities and a half-twist throttle, a loud horn, dual headlights, a brake-activated taillight, ambient side lighting, a 3.5-inch LED color display, and more.

Advertisement – scroll for more content

On the other end of the series is the TITAN Pro e-scooter that brings more power and speed along for the ride. This supped-up model has been given dual 750W motors (each peaking at 1,000W) and a 48V 36Ah battery that not only ramps its possible top speeds up to 31 MPH, but also extends travel times up to 80 miles on a single charge. It brings along much of the same features as its base TITAN counterpart, with the main difference being the additional multi-function control buttons that allow you to switch between single and dual motor usage.

Hiboy’s Better Than Prime Sale will continue through October 12, giving you plenty of time to make decisions if you’re split between varying models – with prices starting from $320.

refrigerator open behind anker solix f3000 portable power station

Anker’s extended Prime Day savings offer latest SOLIX F3000 station and bundles at new lows starting from $1,399

As part of Anker’s extended SOLIX Prime Day Sale, which is continuing through the rest of the week, you can still score the brand’s latest F3000 Portable Power Station (and bundles) at their best prices starting from $1,399 shipped for the station with a FREE protective cover (valued at $99), beating out Amazon’s post-Prime pricing by $100. It carries a $2,599 MSRP since releasing back in June, which we saw drop down to this rate for the first time on Tuesday, when Prime Day officially began. It’s now continuing through the rest of the week, giving you more time to jump on the $1,200 price cut and score it at the best price we have tracked. Head below for the full lineup of ongoing bundle deals too.

If you want to learn more about this new power station, be sure to check out our original coverage of this deal here.

man and daughter plant tree while Mammotion YUKA mini robotic lawn mower mows grass around them

Mammotion’s YUKA Mini 500H and 700H robotic lawn mowers get $350 price cuts starting from a $649 low

By way of its official Amazon storefront, Mammotion is offering continued Prime Day savings on its YUKA Mini 500H Robotic Lawn Mower at $649 shipped, as well as its YUKA Mini 700H Robotic Lawn Mower at $849 shipped. These two models usually fetch $999 and $1,199 at full price, with this being the second-ever price cut to the YUKA Mini 500H’s all-time low with $350 cut from its tag, while the YUKA Mini 700H is getting the same sized price cut to its second-lowest rate – landing $100 above the one-time low that lasted only three days in September.

If you want to learn more about these two robots, be sure to check out our original coverage of these deals here.

ecoflow 800W alternator charger connected to power station in SUV with smart controls on phone

EcoFlow 48-hour flash sale drops 800W alternator charger to new $289 low, more from $104

As part of its extended Prime Day Sale, EcoFlow is offering a 48-hour flash sale on a power station, a generator, an alternator charger, and a DELTA Pro Ultra expansion battery bundle. The backup power solution amongst the bunch is the TRAIL 200 DC station, which you can score starting from $104 by checking out yesterday’s coverage. From there, it’s a matter of what kind of support or expansion you want to jump on, with the brand’s 800W Alternator Charger sitting at a lower-than-ever $289 shipped, for example, which also matches at Amazon right now. While it carries a $599 MSRP, we more often see it priced between $348 and $499, with some sales taking things lower. It was priced at $305 for the initial Prime Day savings, but is now falling even further to mark a new all-time low price and give you $210 off the going rate. Head below for the full lineup of flash deals.

If you want to learn more about this on-the-go charging solution, as well as the other offers, be sure to check out our original coverage of these 48-hour flash deals here.

man using goal zero torch light to see under hood of car

Goal Zero’s 500 Lumen Torch Light that doubles as a solar-charging 5,200mAh power bank hits $38

Amazon is offering the Goal Zero 500 Lumen Torch Light at $37.89 shipped. Usually fetching $50 outside of discounts, this device dropped to $40 back April, with discounts since returning the costs to this same rate over the rest of the year – including for both July and this month’s Prime Day events. The savings seem to be sticking around after the event ended last night, giving you extra time to pick it up with $12 shaved from the tag at the best price of the year.

If you want to learn more about this handy solar-charging gadget, be sure to check out our original coverage of this deal here.

ecoflow early prime day power station sale
lectric one e-bike
anker solix early prime day power station sale

Best Fall EV deals!

Best new Green Deals landing this week

The savings this week are also continuing to a collection of other markdowns. To the same tune as the offers above, these all help you take a more energy-conscious approach to your routine. Winter means you can lock in even better off-season price cuts on electric tools for the lawn while saving on EVs and tons of other gear.

FTC: We use income earning auto affiliate links. More.

Continue Reading

Trending