The Zhitong Finance APP noted that Tesla (TSLA. US) first-quarter eye-popping auto gross margins raised questions among Wall Street analysts who wondered whether the company's gross margins could be sustained amid rising commodity costs and higher expenses to increase production.
According to the financial report, Tesla's automotive gross margin in the first quarter was as high as 32.9%, which is the GM. Traditional car companies like US), F.US and Stellantis are more than double the number of companies that have also invested heavily in the lucrative electric vehicle market.
Against the backdrop of rising commodity prices, Tesla's record gross margin pushed its stock up nearly 9 percent on Thursday and prompted at least five analysts to raise their price targets, but also issued a warning.
They said Tesla's auto gross margin could come under pressure in the coming months as expansion spending at its Berlin and Texas plants gradually becomes part of production costs and is spun off from R&D spending.
Julie Gillespie, head of market research at TipRanks, said: "While gross margins are impressive, some are concerned that they may have peaked."
Rising commodity costs could also erode gross margins, although Tesla's price increases are intended to offset the expected cost increases over the next 6 to 12 months.
Tesla's recent car price increase is aimed at orders that may be delivered a year later in some cases and could incur higher production costs, potentially squeezing profits.
For Tesla, that means increased production will play a key role.
Laura Hoy, an analyst at Hargreaves Lansdown, said: "Its gross margin ultimately depends on the capabilities of the production line. "This makes lost sales one of the biggest fundamental risks to automotive gross margins." Although demand remains strong in the face of higher prices, affordability is always an important factor to consider. ”
Still, many investors remain bullish on the company's prospects after Tesla CEO Elon Musk hinted that the company's sales growth is expected to reach 60 percent this year, up from the 50 percent forecast on last year's fourth-quarter results call.
Investor Thomas Hayes said, "I would be surprised if the gross margin of the car goes down because the gross margin is only going to get better," adding that investing in a factory would have some costs, but production would also grow.
After the outbreak of the new crown epidemic, Tesla has refreshed its shipment and profit records for several consecutive quarters, while competitors have struggled with global supply chain issues and even stopped production.