Tesla's Q1 2023 Financial Report: Growth in Deliveries and Production Amid Challenges

In Q1, Tesla delivered 422,875 units, up from 310,048 units in the same period last year, and produced 440,808 units, up from 305,407 units in Q1 2022. However, the company faced a reduction in average selling price (ASP) year-over-year (YoY) and a negative foreign exchange (FX) impact of $0.8 billion.

Despite the growth in revenue, Tesla's operating income decreased YoY to $2.7 billion, resulting in an 11.4% operating margin. The operating income was primarily derived from increased vehicle deliveries and gross profit growth in the Energy business and other services. However, it was negatively impacted by lower ASP, higher raw material, commodity, logistic, and warranty costs, high costs of production of 4680 cells, and lower credit revenue.

Furthermore, the net cash from operating activities decreased from $3.9 billion to $2.5 billion YoY. With the increase in capital expenditures, the free cash flow of the company also decreased by 80% to $0.4 billion.

In terms of updates, the installation of equipment for Cybertruck production at Gigafactory Texas continued in Q1, and the Shanghai factory is running at full capacity. Tesla expects Giga Shanghai to remain the main export hub, especially with the new Thailand market.

However, Tesla's market share in the key California market decreased to 59.6% of the battery electric vehicle market from January to March 2023. This is down from 72.7% for the full year of 2022 and the lowest since 2017. It remains to be seen how the company will address this issue in the future.

Finally, Tesla's current price-to-earnings (PE) ratio remains at 47.99 times, running ahead of its competitors. This reflects the high expectations of investors for the company's future growth prospects.

Overall, Tesla's Q1 2023 financial report shows both growth and challenges. While the company is continuing to expand its production and delivery capabilities, it is also facing rising costs and decreasing market share in key markets. Investors will be keeping a close eye on how the company addresses these challenges in the coming quarters.