Tesla (TSLA) Q1 2023 earnings preview: What to expect today

Tesla (TSLA) is about to release Q1 2023 financial results today, Wednesday, April 19, after the markets close. As usual, a conference call and Q&A with Tesla’s management are scheduled after the results.

Here we’ll take a look at what both the street and retail investors are expecting for the quarterly results.

Tesla Q1 2023 deliveries

As usual, Tesla already disclosed its Q1 vehicle delivery and production numbers, which drive the vast majority of the company’s revenue.

Earlier this month, Tesla confirmed that it delivered a new record of over 422,000 electric vehicles during the first quarter of the year.

Tesla also confirmed having produced 440,000 vehicles during the quarter – also a new record.

Delivery and production numbers are always slightly adjusted during earning results.

Tesla Q1 2023 revenue

For revenue, analysts generally have a pretty good idea of what to expect, thanks to the delivery numbers.

The Wall Street consensus for this quarter is $23.617 billion, and Estimize, the financial estimate crowdsourcing website, predicts a higher revenue of $24.048 billion.

Despite the new record number of deliveries, these estimates would represent a quarter-to-quarter decrease in revenue due to Tesla’s implementing large price cuts during the first quarter.

Nonetheless, it would be a massive year-over-year increase from $18 billion in revenue in Q1 2022.

Here are the predictions for Tesla’s revenue over the past two years, where Estimize predictions are in blue, Wall Street consensus is in gray, and actual results are in green:

Tesla Q1 2023 earnings

Tesla always attempts to be marginally profitable every quarter as it invests most of its money into growth, and it has been successful in doing so over the last two years now.

For Q1 2023, the Wall Street consensus is a gain of $0.85 per share, while Estimize’s prediction is higher with a profit of $0.94 per share.

The estimates have a wide range this quarter because of the price cuts Tesla implemented during the quarter. Analysts and investors are looking to see how badly it is going to affect Tesla’s margins and, ultimately, its profits.

Unsurprisingly, Tesla achieving the Wall Street consensus would be a big drop in earnings quarter-to-quarter, and the automaker would be flat on earnings year-over-year.

Here are the earnings per share over the last two years, where Estimize predictions are in blue, Wall Street consensus is in gray, and actual results are in green:

Other expectations for the TSLA shareholder’s letter and analyst call

The obvious thing is the gross margin. Investors are going to be looking for that number first. They want to know by how much it dropped and how much room there is since Tesla continued to drop prices after the end of the quarter.

If Tesla can stay in the mid to high teens, I think investors will be happy, but if it dips lower than that, they might have a problem.

Investors will also be looking at insights from management about the pricing strategy, which seems to be changing fast.

Tesla shareholders will also be looking on an update on Cybertruck production as the start of production gets closer, but knowing Tesla management, I wouldn’t expect much more than it being on track for a start of production this summer and volume production next year.

Cybertruck should not have a material impact on Tesla’s revenue in 2023.

I assume that amid margins going down, Tesla investors are going to want to have an update on Tesla’s self-driving program, which has helped margins in the past, but the program has been stalling for a while now.

According to the Say website, where investors can ask and upvote questions for the meeting, shareholders are particularly interested in Tesla Energy this quarter and its potential future impact on Tesla’s financials.

It has been a growing business for Tesla and with a ramp-up in Megapack production, it should be bigger in Q1, but I wouldn’t expect a massive jump in deployment until the second half of the year.

We will see what Tesla has to say about that.

You can join us live on Electrek this evening for intensive coverage of Tesla’s Q1 2023 financial results starting at around 4 p.m. ET for the results and through the evening for news coming out of the conference call and results.