Tesla Q3 - Underwhelming Results

Tesla had results out last week, which were somewhat underwhelming. The company is the leading maker of electric vehicles by far, and has achieved a great deal in the last decade. However, its current stock market valuation requires that it continue to grow very fast.

Tesla cut prices on its top-selling Model 3s and Ys this year but didn't get the sales boost they expected. They blame the macro-economic backdrop, especially high interest rates. New customers are battling to afford their monthly car payments.

Their gross automotive margin is now 16.3%, which is still good but much lower than before. They expect to deliver about 1.8 million vehicles in 2023. Tesla also has a decent business in clean energy markets, with charging, storage, solar panels and services units.

CEO Elon Musk drew attention to the massive effort underway at its plant in Austin, Texas, to bring the new Cybertruck into full production. "We dug our own grave with the Cybertruck. Special products that come along once in a long while are just incredibly difficult to bring to market to reach volume, to be prosperous."

Musk sees Tesla selling 250 000 of them annually, but not until 2025. They have over 1 million pre-orders. I have a feeling that the Cybertruck will be a massive hit because electric vehicles are so much more fun to drive. Its quirky design will be a selling point.

Be patient with your Tesla shares. This is a company that will be much, much bigger by the end of the decade.