Tesla Q2 2023 Earnings – It’s About Margins

After the strong rally, it appears the market is taking profits on commentary around the outlook for margins. It’s not only that they were lower q/q, but also Tesla provided zero insight as to how much lower margins can go. The market does not like uncertainty. Reported automotive gross margins and operating margins peaked in Q222 at 32.9% and 19.3% respectively. Since then, both have been steadily declining downward. The stock is weaker today because the market does not know where or when these two metrics will ultimately bottom.

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