Liam Denning, Columnist

Musk’s Price War Leaves Tesla With Self-Inflicted Wounds

A combination of price cuts and ho-hum sales figures so far this year have squeezed automotive gross margins, putting the EV maker's lofty valuations at risk.

April 19, 2023 at 11:19 PM UTC

By Liam Denning

Liam Denning is a Bloomberg Opinion columnist covering energy. A former banker, he edited the Wall Street Journal’s Heard on the Street column and wrote the Financial Times’s Lex column.

What’s under the hood?
Photographer: Justin Sullivan/Getty Images North America

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We finally got those cheap Teslas — sort of. Yet more price cuts for Tesla Inc.’s electric vehicles arrived ahead of Wednesday evening’s results, with the base Model 3 slipping just under the totemic $40,000 level. That doesn’t bode well for the current quarter if the latest numbers are anything to go by.

A combination of price cuts and ho-hum sales figures so far this year have centered the ever lively debate about Elon Musk’s EV juggernaut on one question: Where will automotive gross margins pan out? To give you a sense of the answer, Tesla decided to change its format and drop that number from the report. But I calculated it here.