Tesla profit fell sharply in the first quarter of the year after the company cut its prices to boost sales.

Tesla’s gross profit margin dipped to 19.3% in the first quarter, some 10 percentage points lower than last year.

Tesla has moved its strategy to boost market share with price cuts at the expense of profitability. Some market analysts have hoped to see more evidence of higher sales in the face of price cuts of up to 20% on some models.

Automotive revenues in Q1 were $19,963m  versus $21,307m in the previous quarter. GAAP gross margin of 19.3% compares with 29.1% in Q1 2022. Gross profit was down 17% year-on-year $4,511m.

Tesla deliveries in Q1 stood at 440,808 units versus 439,701 units in Q4 2022.

In a statement the company said: “Although we implemented price reductions on many vehicle models across regions in the first quarter, our operating margins reduced at a manageable rate.

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“We expect ongoing cost reduction of our vehicles, including improved production efficiency at our newest factories and lower logistics costs, and remain focused on operating leverage as we scale.”