Enlarge / Could 2023 be the year we finally see these on the road? (credit: Tesla)
Tesla is selling plenty of electric vehicles these days, thanks in large part to a string of heavy price cuts this year. But those sales haven't translated to higher profits, according to Tesla's Q1 2023 financial results. In fact, net income dropped 24 percent year on year. Earnings per share fell by nearly as much, down 23 percent to $0.73 per share.
The seemingly never-ending price cuts did not help, but they weren't the only cause. Tesla says that many of its costs—raw materials, commodities, logistics, and warranties—have gone up, and trying to increase production of its new 4680 lithium-ion battery cell has not been cheap. It's also making less money from selling regulatory credits—just $564 million this quarter compared to $679 million this time last year. Free cash flow fell 80 percent from Q1 2022 to $441 million.
It wasn't all bad news for the automaker. Its automotive revenues grew 18 percent compared to Q1 2022, and total revenue increased by 24 percent to $23.3 billion. It was a good quarter for Tesla's battery storage and solar operations. These grew revenue by 148 percent year on year, deploying 40 MW of photovoltaics and 3.9 TWh of energy storage—a 360 percent increase compared to the 846 GWh of batteries it shipped in Q1 2022.
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