How much profit is hidden in Tesla’s massive $78 billion in auto revenue?

Tesla (NASDAQ: TSLA) has had a record year in electric vehicle sales. In 2023, the company delivered 1.8 million cars, including 1.2 million of its Model Y, which became the best-selling vehicle of any kind worldwide.

Tesla made headlines all year for cutting prices to stimulate demand as consumers suffered from the strain of the economy high inflation and rising interest rates. The company reduced the sticker price of its electric vehicles by an average of 25.1% between December 2022 and December 2023.

This had a significant impact on the company’s results. So how much of Tesla’s $78.5 billion in 2023 car sales was profit?

Tesla’s profits fell for the first time since 2017

In 2023, it cost Tesla $65.1 billion to produce and sell $78.5 billion worth of electric vehicles, leaving the company with $13.4 billion in revenue. gross profit.

By comparison, in 2022 it cost Tesla $49.6 billion to produce and sell $67.2 billion worth of electric vehicles, generating a gross profit of $17.6 billion. That represented a gross profit margin of 26.2%, which fell to 17.1% in 2023, highlighting the effects of Tesla’s price cuts.

In the end, Tesla’s companywide earnings per share – including the financial results of its solar, storage and services businesses – came to $3.12. It marked a decline of 23% compared to the 2022 result, and was the first time since 2017 that the company’s annual profit fell.

Tesla’s price cuts have continued into early 2024, so Wall Street analysts are betting that profits could fall again this year. Tesla stock has fallen 54% from its all-time high as falling profits have forced investors to…

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