Shillong, October 19: In the third quarter (Q3), Tesla, led by Elon Musk, reported a 44 percent decline in profits, dropping to $1.85 billion compared to the same period in the previous year when it had achieved $3.3 billion in profits.
As per IANS, the electric car manufacturer recorded $23.4 billion in revenue during the third quarter of 2023, showing a slight increase from the $21.4 billion reported in the same period the previous year.
For the third consecutive quarter, the company’s operating margins decreased, indicating that frequent price reductions have impacted Tesla’s financial performance.
Tesla shared in its quarterly earnings statement, “Our cost of goods sold per vehicle decreased to $37,500 in Q3. While production costs at our new factories remained higher than our established factories, we have implemented necessary upgrades in Q3 to enable further unit cost reductions. We continue to believe that an industry leader needs to be a cost leader.”
During an earnings call, Musk acknowledged that it will take “18 months before it’s a significant cash flow contributor” for the soon-to-be-delivered Cybertruck.
Musk emphasized, “I do want to emphasize that there will be enormous challenges in reaching volume production with the Cybertruck and then making the Cybertruck cashflow positive — this is simply normal.”
Tesla has initiated pilot production of the Cybertruck at Gigafactory Texas, remaining on track for initial deliveries this year.
The company has also commissioned one of the world’s largest supercomputers to accelerate AI development, with compute capacity more than doubling compared to Q2.
“Our large installed base of vehicles continues to generate anonymized video and other data used to develop our FSD Capability features,” the company noted.
Tesla stated that it plans to expand production as rapidly as possible, aligning with the 50 percent Compound Annual Growth Rate (CAGR) target it began guiding in early 2021.
“For 2023, we expect to remain ahead of the long-term 50 percent CAGR with around 1.8 million vehicles for the year,” Tesla added.