Tesla's Price Cuts Were Necessary, As Profits Collapse

Jul. 05, 2023 9:46 AM ET

The Value Portfolio

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Summary

• Tesla once again managed to increase volumes from both production and sales but at the cost of substantial price cuts.
• The company seems to need price cuts to maintain volumes, with additional recent tax cuts and short delivery times. That doesn't count tax subsidy wind-downs.
• The company's profits already took a hit in the first quarter as a result of price cuts, and we expect that to have gotten worse in this quarter, hurting profits.
• The Retirement Forum members get exclusive access to our real-world portfolio. See all our investments?here ?

Tesla, Inc.?(NASDAQ:TSLA) has gone up another 7% towards $900 billion and near its all-time high of a $1 trillion market cap. The company was buoyed by strong order numbers, however, those order numbers were buoyed by massive price cuts. As we'll see?throughout this article, we expect the company to underperform going forward.

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