Tesla shares recouped some of its losses in January after the company cut prices on most of its electric cars in the United States and Europe to revive sales. The price of a Model 3 sedan, Tesla’s cheapest, dropped $3,000 and now sells for $44,000 in the United States before government incentives.
The downgrades appear to have sparked a surge in orders and helped reassure investors that Tesla had a plan to maintain its dominance in electric cars. Tesla faces a stronger challenge from established car companies such as Hyundai, Ford Motor, General Motors and Volkswagen, which are selling more battery-powered vehicles and at lower prices than Tesla.
While the price cuts helped boost sales, they also hurt Tesla’s profit margin. Gross profit margin on auto sales fell to 26 percent in the fourth quarter from 28 percent in the third quarter of 2022 and to 31 percent in the fourth quarter of 2021.
Tesla said on Wednesday it would begin production of its long-awaited Cybertruck by the end of the year, though it won’t be able to ramp up production of large numbers of the vehicle until 2024. Delays on the truck, which was unveiled in 2019, have allowed rivals like Rivian and Ford beat Tesla to market with electric pickup trucks.
“The fact that the Cybertruck is on time is very positive,” Garrett Nelson, a senior equity analyst at CFRA Research, said in a note to clients.
Net profit for the quarter was $3.7 billion, up from $3.3 billion in the third quarter, Tesla said. For the full year, Tesla’s profit more than doubled to $12.6 billion from $5.5 billion in 2021. Sales for the year, including revenue from solar panels, energy storage and other businesses, rose to $81.5 billion from $53.8 billion the previous year.
Tesla said it expected to produce 1.8 million cars in 2023, up from 1.4 million in 2022. That would be a more modest growth rate than in 2022, when production increased by nearly 50 percent.
