Tesla Q2 Revenue Up 26% but Profits Plummet, Earning Just $160 per Vehicle

Tesla reported total revenue of $28.236 billion for the second quarter of 2023, up 26% year-over-year and approximately $2 billion above market expectations. Global vehicle deliveries reached a record-high 480,100 units for the same period in company history. However, the company’s profitability declined significantly: gross margin stood at 16.8%, below the expected 19.4%; operating income was $398 million, down 57% year-over-year; and operating margin fell to 1.4% from 4.1% a year earlier. Adjusted earnings per share came in at $0.33, well below the anticipated $0.53. The financial report showed net income attributable to common shareholders of $1.114 billion, which included $763 million in after-tax unrealized gains from its investment in SpaceX and $274 million from one-time tax benefits related to the release of deferred tax assets in California. Excluding these non-recurring items, core operating net income was only $77 million, or roughly $160 per vehicle (approximately RMB 1,150). Tesla’s operating margin for the quarter also lagged notably behind Toyota’s 6.8% and General Motors’ 8.6%. Following the earnings release, Tesla’s stock dropped more than 4% in after-hours trading.