Tesla's Electric Challenge: Navigating Profit Margins Amid Falling Deliveries

Tesla reported higher-than-expected automotive profitability despite decreasing electric vehicle sales and revenue below projections. Challenges include intensified competition, trade policy impacts, and CEO Elon Musk's controversies. The company is addressing these issues with financing deals, discounted inventory, and developments in self-driving technology, impacting its stock value and market position.

Tesla surprised analysts with better-than-expected profitability for its automotive sector in the first quarter, although revenue fell short due to a drop in electric vehicle sales. The company's automotive gross margin reached 12.5%, surpassing the 11.8% predicted by analysts.

This higher-than-anticipated margin has provided some relief to investors who are worried about Tesla's dwindling profits from automotive sales. Meanwhile, the company has expressed concerns about the impact of fluctuating global trade policies on its operations and market demand.

Tesla's revenue for the January-March quarter stood at $19.34 billion, falling below the expected $21.11 billion. The company faces challenges such as increased competition from Chinese manufacturers, political controversies involving CEO Elon Musk, and tariff-related issues impacting its supply chain and cost structure.

(With inputs from agencies.)