by Akash Sriram and Hyunjoo Jin
(Reuters) – Tesla on Wednesday reported second-quarter gross margin slumping to a four-year low as electric vehicle maker boss Elon Musk stepped up in a price war with rivals.
The company’s sales and earnings, however, beat expectations on Wall Street, where Tesla saw its stock rise 2% in post-close trading.
Pressured by its competitors and by economic uncertainty, the firm led by Elon Musk has multiplied price cuts and other incentives to sell off its stocks of vehicles, a decision that weighed on its operating margin – a closely monitored indicator of the financial health of the company.
Tesla reported a gross margin of 18.1% in the April-June period, compared to 19.3% in the previous quarter and 26% in the same period last year.
This is a 16-quarter low.
The automaker said in a statement that it is focused on lowering costs and developing new products, warning that “the challenges of these uncertain times” were not yet over.
He also said that lower raw material prices and US government tax credits were helping to drive down production costs per vehicle.
Tesla on Wednesday confirmed it expects to deliver around 1.8 million vehicles this year, after delivering a record 466,000 vehicles worldwide in the April-June period.
The group’s quarterly revenue came in at $24.93 billion, versus a consensus of $24.48 billion according to Refinitiv data.
Tesla reported earnings on an adjusted basis of 91 cents per share, while analysts had expected earnings of 82 cents per share.
(Reporting Akash Sriram in Bangalore and Hyunjoo Jin in San Francsico; Jean Terzian)
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