Tesla saw its profits nosediving 44 percent to $1.85 billion in the third quarter (Q3) from the year-ago period when it had registered $3.3 billion in profits.
The electric car maker reported $23.4 billion in revenue during the third quarter of 2023, a small increase from $21.4 billion at the same time last year.
The company’s operating margins fell for the third quarter in a row, meaning that frequent price cuts have taken its toll on Tesla’s bottom line.
“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,” Tesla said in its quarterly earnings late on Wednesday.
During an earnings call, Musk said that the soon-to-be-delivered Cybertruck will take “18 months before it’s a significant cash flow contributor.”
“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,” Musk said during the earnings call.
At Gigafactory Texas, Tesla has started pilot production of the Cybertruck, which remains on track for initial deliveries this year.
Tesla said it has commissioned one of the world’s largest supercomputers to accelerate the pace of its 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,” said the company.
The company said it is planning to grow production as quickly as possible in alignment with the 50 percent CAGR target “we began guiding to in early 2021”.
“In some years we may grow faster and in some we may grow slower, depending on a number of factors. For 2023, we expect to remain ahead of the long-term 50 percent CAGR with around 1.8 million vehicles for the year,” said Tesla.
