Tesla (TSLA) releases Q1 2023 results: meets expectations, impresses with gross margin

Tesla (TSLA) released its financial results and shareholders letter for the first quarter of 2023 after market close today.

We are updating this post with all the details from the financial results, shareholders’ letter, and the conference call later tonight. Refresh for the latest information.

Tesla Q1 2023 earnings expectations

As we reported in our Tesla Q1 2023 earnings preview earlier today, the Wall Street consensus for this quarter was $23.617 billion in revenue and earnings of $0.85 per share.

It’s a harder quarter to predict for Wall Street due to the significant price cuts that Tesla implemented during the quarter.

We will be looking to see if Tesla meets, beats, or misses the expectations.

Tesla Q1 2023 financial results

Just after the market close today, Tesla released its financial results and confirmed that it managed to meet expectations $0.85 per share (non-GAAP) on earnings and missed on revenue by about $300 million.

Tesla reported $23.3 billion in revenue in Q1 2023, down ~$300 million from Wall Street’s expectations, but it did meet earnings expectations.

The biggest news is likely the fact that the company managed to retain industry-leading 19.3% gross margins on its automotive business despite the price cuts earlier this quarter.

Tesla explained its pricing strategy in the shareholder letter:

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.

The automaker added about its gross margin:

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.

We will be posting our follow-up posts here about the earnings and conference call to expand on the most important points (refresh the page to see the most recent posts):

Here’s Tesla’s Q1 2023 shareholder presentation in full:

Here’s Tesla’s conference call for the Q1 results: