The Tesla stock They plummeted more than 7% on the Nasdaq at the beginning of the session on Thursday, after the company reported a 24% year-on-year drop in its profits for the first quarter of 2023 due to the reduction in prices for its electric vehicles.
At 9:30 in the morning (central Mexico time), Tesla shares lost 7.46%, each trading at $167.12, according to data from the Market Watch site. If the drop of this magnitude continues, it would be its biggest intraday loss since January.
In the January-February 2023 period, the world’s largest electric car manufacturer had a net income of 2,513 million dollars, compared to 3,318 million dollars the previous year, according to its latest quarterly report.
“Although we implemented price reductions on many vehicle models in all regions during the first quarter, our operating margins decreased at a manageable rate,” Tesla said in a presentation to its investors on the results of the first quarter of the year.
Tesla has reduced the final prices of some of its EV models in the United States by up to 25%, in a strategy that seeks on the one hand stimulate demandbut also so that their cars are eligible to receive tax credits granted by the US government.
The Inflation Reduction Law of President Joe Biden, approved by the US Congress in August 2022, established tax incentives of 7,500 dollars for buyers of certain EV models, with the aim of making these vehicles more affordable for consumers in that country.
However, many of Tesla’s cars were ineligible for the stimulus because their price was above the cap set in the legislation, so Tesla embarked on a price-cutting strategy in recent months.
Tesla said it expects the price of its EVs to continue to move up or down, “depending on a number of factors.”
“In the future, it will be important to assess the impact on the profitability of the issuer, by contemplating further cuts in the prices of their vehicles”, Monex Casa de Bolsa analysts said in a note.
The company’s sales amounted to 23.329 million dollars in the first quarter of 2023, a year-on-year increase of 24 percent. In addition, it delivered 422,875 vehicles, an increase of 36% compared to the same period last year.
Despite this Thursday’s loss, Tesla’s stock is up more than 30% so far in 2023.
