“We’re making a car that, if autonomy pans out, and we think it will, where that asset will be worth a hell of a lot more in the future than it is now. “However, we expect our vehicles, over time, will be able to generate significant profit through autonomy. “We’ve taken a view that pushing for higher volumes and a larger fleet is the right choice here versus a lower volume and higher margin,” Musk said. Musk defended the margins, saying that the company would be well-positioned with a high volume of its cars on the road once getting past the current state of macroeconomic uncertainty. Some analysts were disappointed with Tesla’s gross profit margins, which landed beneath Wall Street expectations of 21 percent at just 19 percent. Still, CEO Elon Musk’s promise for a future of significant profitability based on its Full Self-Driving system is keeping some analysts bullish, despite uncertain economic conditions.ĭuring the earnings call, Musk pointed to Tesla’s FSD beta as having the potential to generate significant profits in the future, as detailed in a recent report from Barron’s. Tesla’s Q1 earnings call saw mixed responses from Wall Street, largely due to how its price cuts affected its margins during the quarter.
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