Tesla ‘s fourth-quarter results are an early sign that the pioneering automaker has entered a new stage, according to Wedbush analyst Dan Ives. Tesla beat estimates on the top and bottom lines for the fourth quarter . However, its automotive gross margin came in at 25.9%, down from more than 30% a year ago. That drop shows that Tesla is having to get aggressive on pricing to defend its turf, as the rest of the auto industry races to catch up in the electric vehicle space, Ives said Wednesday. “They’re ultimately needing to sacrifice margins for volume. And now the question is, with a price war happening in China, what does the trajectory look like in 2023,” Ives said on CNBC’s ” Closing Bell: Overtime ” on Wednesday. Tesla has apparently implemented widespread price cuts in recent weeks, which could be due in part to increasing competition. “That’s what I view as a moment of truth for Tesla. Can they ramp deliveries — which we believe they can – and the scale and maintain the margins, which are so well above the industry,” Ives said. Tesla did maintain its long-term outlook for 50% compound annual growth in vehicle deliveries, but its 1.8 million projection for 2023 would fall below that mark. Ives said it was smart for the company to roll out a more realistic number in an uncertain economic environment.
All news and articles are copyrighted to the respective authors and/or News Broadcasters. LC is an independent Online News Aggregator