Tesla (TSLA) scores record revenue in Q2 2023, gross margin drops to 18.2%, Earnings Call highlights, more

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Tesla (TSLA) published its Q2 2023 earnings report yesterday evening. The automaker also held the 2nd quarter earnings call at Giga Texas. The Tesla Q2 2023 earnings call was joined by Tesla CEO Elon Musk and the company’s senior management.

Tesla reported an all-time high revenue of around $25 billion in Q2 2023. However, due to constant vehicle price drops and macroeconomic factors in play, Tesla’s gross margin dropped to 18.2% (down by -682 basis points).

Tesla’s gross margin including regulatory credits last year in Q2 2022 was 25%. So, it’s a drop of 6.8% year-over-year (YoY). While compared to Q1 2023, Tesla’s gross margin dropped from 19.3% to 18.2%. That’s a drop of 1.1% QoQ.

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Tesla’s operating margin dropped to just under 10% (down by -493 basis points) in Q2 2023 compared to the previous quarter.

After a significant increase in the operating margin in Q3 2022, it has been constantly dropping each quarter since then (see TSLA Financial Summary screenshot from Q2 2023 report below).

Tesla (TSLA) Q2 2023 Financial Summary.
Tesla (TSLA) Q2 2023 Financial Summary. Complete report in PDF below. Credit: Courtesy of Tesla, Inc.
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Wall Street analysts were expecting this drop in Tesla margins. However, Tesla did a little better contrary to the expectations.

According to CNBC Business News anchor Phil Lebeau, Wall Street was expecting Tesla’s automotive gross margin of below 17% before yesterday’s earnings call. However, Tesla did not report automotive gross margins excluding regulatory credits in the financial report (PDF below).

In Q2 2023, Tesla’s regulatory credits brought in a revenue of only $282 million. In Q1 2023, these credits attributed to revenue of $521 million. So, revenue from regulatory credits dropped by around 46% for Tesla this quarter.

Tesla's (TSLA) revenues break up in the company's Q2 2023 financial report.
Tesla’s (TSLA) revenues break up in the company’s Q2 2023 financial report (PDF below).
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Highlights from the Tesla (TSLA) Q2 2023 Earnings Call

Tesla CEO Elon Musk, Head of Investor Relations Martin Viecha, CFO Zachary Kirkhorn, and SVP, Powertrain and Energy Engineering Drew Baglino attended the company’s Q2 2023 earnings call yesterday and answered questions (listen to the audio below).

Following are the main points that Elon Musk and his team talked about during the call:

Audio recording: Listen to Tesla (TSLA) Q2 2023 earnings call webcast.

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Tesla Q2 2023 Financial Update (PDF).

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Iqtidar Ali
Iqtidar Alihttp://www.teslaoracle.com
Iqtidar has been writing about Tesla, Elon Musk, and EVs for more than 3 years on XAutoWorld.com, many of his articles have been republished on CleanTechnica and InsideEVs, maintains a healthy relationship with the Tesla community across the Social Media sphere. You can reach him on Twitter @IqtidarAlii

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