As already announced, the official Tesla Earnings Call took place on 18.10.2023. Here, Tesla regularly presents the figures for the past quarter. In the third quarter of 2023, Tesla generated revenue of $23.35 billion, of which $19.6 billion was generated by the automotive division. This represents a 9 percent increase over Q3 2022, but is below the record Q2 2023 figures.
GAAP earnings, which are prepared in accordance with generally accepted accounting principles (GAAP), reported a profit of $1.85 billion in the most recent quarter, down 44 percent from 3Q2022. In addition, Tesla's operating margin fell to 7.6 percent in the third quarter of 2023. In previous years, the operating margin had dropped from 16 percent to 11.4 percent and finally to 9.2 percent. This decline in operating margin was to be expected as Tesla implemented price cuts around the world earlier this year and tightened them again in September. Tesla is sticking to its goal of producing 1.8 million vehicles by the end of the year. The company plans to further expand production capacity and aims to sell around 2.5 million electric cars by 2024.
Tesla's profit decline in the latest quarter was due to several factors, including lower average vehicle prices, heavy investment in preparation for production of the Cybertruck, investment in artificial intelligence (AI) and other R&D projects, as well as one-time production ramp-up costs and idling costs related to factory upgrades. Tesla had previously stated that the decline in production and deliveries in the most recent quarter was due to planned production pauses due to factory modernizations. These could include the conversion at Gigafactory Shanghai, where mass production of the revised Model 3 "Highland" had begun.
Tesla's strategy is to boost sales and temporarily put profitability on the back burner. The company emphasizes that an industry leader must also be a cost leader and that investment in research and development and capital expenditures are necessary for future growth, while maintaining positive free cash flow.
The Gigafactory in Mexico will be built, Musk reiterated in response to an analyst's question about whether the project could be postponed indefinitely. However, he said the right timing would depend on interest rate developments. The first construction work would probably start next year. However, he did not want to go full uncertainty, the Tesla CEO said unusually cautiously after recalling Tesla's near insolvency at the end of 2008.
Tesla is investing more in artificial intelligence (AI) to strengthen its competitiveness. It has more than doubled the size of its internal AI training computer, and the company expects gains in hardware to be accompanied by accelerating gains in AI, software and fleet over time.
