After the company missed Wall Street expectations on third-quarter gross margin, profit and revenue, Musk said he was cautious about going"full tilt" on the Mexico factory.
Tesla has managed to maintain demand with a series of price cuts, but Musk spent much of the call voicing concerns about further expansion, saying that he was afraid rising interest rates would make cars unaffordable. Pressed for details on the factory, Musk said:"I am scarred by 2009 when General Motors and Chrysler went bankrupt."
The company is trying to survive the price war it started, mopping up any global demand for electric cars even as high interest rates and lower price tags at some rivals mute EV sales. Some analysts have said it may need to cut prices further to achieve its annual production target. Tesla's stock has more than doubled this year after a slump last year as investors bet the company will fare better than rivals in an uncertain economy and get a long-term margin boost from its self-driving software.Tesla's gross margin dropped to 17.9% in the quarter ended September, compared with 25.1% a year earlier, when it had yet to start cutting prices. In the second quarter, Tesla had posted a gross margin of 18.2%.
Margins fell despite a roughly $2,000 per vehicle reduction in raw material costs in the past quarter.
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Source: NewstalkFM - 🏆 19. / 55 Read more »