Tesla’s revenues and profits declined in Q3 as the car manufacturer produced and delivered fewer vehicles than it did in the second quarter.
Financial results published by Tesla reveal that its total automotive revenues fell from $21.26 billion in Q2 to $19.65 billion in Q3. However, automotive revenues are up 5% from Q3 2022 when they reached $18.69 billion. When factoring in revenues from Tesla’s energy generation and storage businesses, as well as services and other revenue, they topped out at $23.35 billion, down from the $24.92 billion of Q2 2023 but greater than the $21.45 billion of Q3 2022.
Tesla’s operating margin has also taken a hit, falling to 7.6% in Q3 having been 9.6% in Q2 and 17.2% in Q3 2022. Total gross profit has also dropped to $4.17 billion. This represents a fall from the $4.53 billion of Q2 and is down a significant 22% from the $5.38 billion of Q3 2022.
The electric car manufacturer notes that its operating income was primarily impacted by an increase in operating expenses due to the Cybertruck, AI, and other research and development projects, the cost of production ramp and idle costs related to factory upgrades, the price cuts made across its range of models, and currency fluctuations.
Read: Tesla Production And Delivery Figures Fall In Q3, Prompting Share Price Drop
Elsewhere, Tesla has revealed that its revenues from regulatory credits jumped to $554 million in the quarter and that its cash, cash equivalents, and investments soared from $3 billion to $26.1 billion. The company also reduced the cost of goods sold per vehicle to around $37,500 and says it has implemented factory upgrades to allow for greater cost reductions.
Tesla continues to lead the EV race but China’s BYD is snapping at its heels. In the third quarter, BYD sold 431,603 battery-electric vehicles, just a few thousand less than the 435,059 that were sold by Tesla. In addition, BYD’s profits for the first nine months of 2023 are expected to jump between 120-140%, and third-quarter net profit could double thanks to its growing sales and improved margins.
