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Tesla’s rampant price cutting is taking a toll on its profits

The Tesla logo on a red, black, and white background.
Illustration: Alex Castro / The Verge

Tesla published its first quarter earnings report in which the company said it earned $2.9 billion in net income on $23.3 billion in revenue. That represents a 24 percent increase year over year compared to $18.7 billion in revenue in Q1 2022.

Most importantly, the company’s gross margins fell to 19.3 percent, a sign that its rampant price cutting was starting to take a toll on its bottom line. Gross margins were down 18.9 percent quarter-over-quarter, and 33 percent year-over-year.

Some analysts were dour about Tesla’s future in reaction to the earnings report. “Tesla’s underwhelming quarter is the latest sign that growing macroeconomic uncertainty is having some impact on demand for its electric vehicles,” Jesse Cohen, senior analyst…

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