TSLA Q1 2023 Earnings

Call Details

• Call Title: Tesla, Inc. Q1 2023 Earnings Call
• Date: April 19, 2023 at 9:30 PM UTC
• Management Team:
  • Martin Viecha (VP of Investor Relations)
  • Elon Musk (CEO)
  • Zachary Kirkhorn (CFO)
  • Drew Baglino (SVP of Powertrain and Energy Engineering)
  • Roshan Thomas (VP Supply Chain)

Call Summary

Financial Performance

• Automotive gross margin and operating margin reduced sequentially in Q1 while remaining described as healthy.
• Energy storage deployment reached nearly four gigawatt hours in Q1, which was the strongest quarter ever for stationary storage.
• The storage business generated its highest gross profit to date in Q1 while still representing a small percentage of total company revenue.
• Automotive results were impacted by additional price actions taken in the second half of the quarter and one-time items including warranty adjustments and deferred revenue for certain autopilot features.
• Per-unit costs improved for Austin and Berlin driven by record volumes, but those factories continue to present a margin headwind until they reach intended volumes.
• 4680 cell program production in Texas increased 50% quarter over quarter with a 25% reduction in COGS for the program over the quarter.
• The company highlighted logistics and commodity cost improvements beginning to be realized, which contributed to cost reduction efforts in Q1.

Guidance

• No specific near-term margin or revenue guidance was provided for Q2 or FY2023 for the consolidated business.
• The company stated an aspiration of mid-20% gross margins for new programs, including storage, but said that target is not a promise.
• Tesla expects to provide more formal guidance on storage as the business smooths and grows, with commentary that this could occur in a few more quarters.
• Cybertruck handover and pricing/spec details were deferred to a delivery event anticipated probably in Q3.
• The company expressed a shot at 2.0 million vehicle production in 2023 as an upside case while being comfortable with 1.8 million as a base case.
• The 4680 program is on track to achieve steady-state cost targets over the next 12 months, which was presented as a key part of future cost guidance.
• Management explicitly stated commodity price declines are expected to have a more meaningful impact in the second half of the year.