BIZARRE: Price cuts may hurt tesla s margins - You Need To See This

Tesla (TSLA) on Sunday reported Q1 vehicle deliveries of 422,875, up about +4% from Q4 and just above the consensus of 421,164.  However, the stock is down more than -5% today on disappointment that sales were not even higher, especially after the company slashed prices across its vehicle lineup.  Also, concerns are mounting that Tesla’s price cuts may eat into profit margins and that inventories may rise as the company has been boosting vehicle output at its new plants in Germany and the U.S.

In late January, Tesla CEO Musk said that orders for new cars were running at almost twice the production rate after the company cut prices of its top-selling Model Y by as much as 20% and discounted its most expensive models by tens of thousands of dollars.  However, Sunday’s report showed a slowdown in sales as the quarter ended, with vehicle production outpacing sales by almost 18,000 vehicles.