Tesla shares recouped some of their January losses following the company reduced prices on most of its electric cars in the United States and Europe to revive sales. The price of a Model 3 sedan, the cheapest Tesla, fell $3,000 and now sells for $44,000 in the United States before government incentives.
The price cuts appear to have boosted orders and helped reassure investors that Tesla had a plan to maintain its electric car dominance. Tesla faces more of a challenge from established automakers like Hyundai, Ford Motor, General Motors, and Volkswagen, which are selling more battery-powered vehicles and at lower prices than Tesla.
While the price cuts helped boost sales, they also weighed on Tesla’s profit margin. The gross profit margin on auto sales slipped to 26 percent in the fourth quarter from 28 percent in the third quarter of 2022 and 31 percent in the fourth quarter of 2021.
Tesla said Wednesday it would begin production of its long-awaited Cybertruck by the end of the year, though it won’t be able to ramp up production of a large number of the vehicle until 2024. Delays with the truck being unveiled in 2019 have allowed rivals like Rivian and Ford to launch Tesla with electric pickups.
“The fact that the Cybertruck is on schedule is a huge benefit,” said Garrett Nelson, senior equity analyst at CFRA Research, in a note to clients.
Net income for the quarter was $3.7 billion, up from $3.3 billion in the third quarter, Tesla said. For the full year, Tesla’s earnings more than doubled to $12.6 billion from $5.5 billion in 2021. Revenue for the year, including revenue from solar panels, energy storage and other businesses, rose to $81.5 billion from $53.8 billion a year earlier.
Tesla said it expects to produce 1.8 million cars in 2023, up from 1.4 million in 2022. That would be a more modest growth rate than in 2022, when production rose nearly 50 percent.
