U.S. electric vehicle manufacturer Tesla's net profit for the first quarter of this year sharply declined compared to the same period last year.
According to Tesla's Q1 earnings report released on the 19th (local time), net profit was $2.513 billion (approximately 3.3398 trillion KRW), down 24% from the same period last year. Adjusted earnings per share (EPS) stood at 85 cents, matching market expectations.
Revenue increased by 24% year-over-year to $23.329 billion (approximately 31.0042 trillion KRW). Although vehicle sales rose due to Tesla's price cuts in the first quarter, net profit significantly decreased.
Meanwhile, on the 18th, a day before the earnings announcement, Tesla announced on its website that it would reduce the U.S. selling prices of the Model Y and Model 3 by $3,000 and $2,000 respectively. As a result, the selling price of the Model Y dropped by 20% this year, and the Model 3's price fell by 11%.
Tesla appears to have made this decision to achieve its sales targets amid forecasts of an economic downturn and weakening demand. This marks the sixth price reduction in the U.S. alone this year.
To meet its annual sales target of 2 million units, Tesla needs to achieve a 52% sales growth rate this year. Since the sales growth rate in the first quarter was 36% year-over-year, falling short of market expectations and targets, it is expected that Tesla will need to increase the sales growth rate to over 52% in the second to fourth quarters.
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