Tesla released its fourth quarter 2022 financial results and finished the year strong. Despite significant price reductions, 2023 promises to be exceptional for Elon Musk’s firm. We learn that Tesla will continue to make money even selling its Model 3 and Model Y, suggesting that this price drop could be sustainable.
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Tesla just released financial results for the fourth quarter of 2022, and an investor question-and-answer session was held right after the announcement. We learn that Tesla, even selling its Model 3 and Model Y, is not ready to stop making money.
Tesla, a giant with exceptional margins
during the traditional earnings call of Tesla after the publication of the quarterly financial results, the manufacturer recalled that it was one of the leaders in a specific point: the gross margin per vehicle produced. In fact, while most Q4 2022 sales were recorded in December, when numerous price cuts allowed the undecided to cross the threshold, the gross margin stands at 25.9%, versus 27.9% in the third quarter when prices were higher.
Some investors have expressed concern about the drop in this gross margin, but Tesla’s chief financial officer (Zach Kirkhorn) calmed down. Demand will not weaken, quite the oppositeand Zach Kirkhorn has also indicated that in 2023, Tesla should have a gross margin greater than 20% and an average sales price of more than $47,000. And this despite recent price cuts.
The average selling price is generally a good indicator for analysts regarding the financial health of the company, and It is important to remember that this fee is not necessarily the one paid by the end customer. In fact, this does not include green bonuses or tax credits to which some customers are entitled. For example, a Tesla Model 3 Propulsion in France can today pay the final customer 39,900 euros, but for Tesla, theThe sale price is in fact 44,900 euros.
Elon Musk also allowed himself to add ” that there are millions of cars where autonomous driving can be sold at essentially 100% gross marginreferring to the appropriate option that sells for $15,000 in the United States. With a 2023 gross margin outlook of 20%, Tesla continues to emerge a little further from the rest of the auto industry, particularly in electric vehicles. In these recessionary times, Tesla seems extremely well prepared to face 2023: its coffers are full, its debts are zero and the demand for its vehicles is skyrocketing, even though production costs have never been lower for the company. Who will be able to compete this year?
Should you buy a Model 3 now?
This financial information allows you to read between the lines and understand that Tesla has no intention of drastically increasing the price of its electric cars during the first quarter of 2023. If you want to buy one, you still have a bit of time ahead of you. you. But beware, everything can change overnight at Tesla. If you buy now and the price increases in the meantime, you will be entitled to the current price at the time of delivery. If the price goes down, Tesla will charge you the new price. However, it is difficult to advise you to buy now, because the future redesigned Model 3 could be presented and marketed in the coming weeks.
Tesla has just made a big price drop in France on its two flagship electric cars, the Model 3 and the Model Y. The price plummets by more than 10,000 euros according to…
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