Price cuts are helping Tesla (US:TSLA) sell more cars than ever. In the three months to June, Tesla delivered 466,140 cars – 83 per cent more than the same period last year. This number was also 5 per cent ahead of analyst’s consensus forecast of 445,000 deliveries.
Chief executive Elon Musk decided to cut the price of the cars last year in response to rising inflation and the tightening economic conditions.”If there’s a very high fed rate or interest rates are very high, every time that the Fed raises interest rates, that’s equivalent to increasing the price of a car,” he said on the last analyst results call.
So far, these cuts are working in terms of volume, but margins will be impacted. In the first quarter of the year, the operating margin dropped 4.6 percentage points month-on-month to 11.4 per cent. Analysts are expecting the average margin for 2023 to be 11.8 per cent.
The strength of Tesla is its operating margin is way ahead of industry competitors, with most others’ operating margins in the mid to single digits. This gives Musk a bit more room to play with pricing. Tesla’s share price was up 1.7 per cent in after-hours trading. AS
Read more: EV price war could spread to older cars
Underwhelming trial result hits AstraZeneca shares
Markets were disappointed in AstraZeneca (AZN) this morning following the release of data from a phase III trial of an oncology drug known as datopotamab deruxtecan, or Dato-DXd. Though the therapy stalled progression of advanced small-cell lung cancer for longer than chemo, the company did not declare the improvements “clinically meaningful”. The company had previously said that a two to three month improvement in progression-free survival versus chemotherapy would be needed to meet this target. Shares were down nearly 6 per cent by mid-morning. JJ
Tesco turns to seasoned Murphy as new chair
Tesco (TSCO) has appointed City veteran Dr Gerry Murphy as its new chair. The current head of Tate & Lyle (TATE) and Burberry (BRBY) will join the grocer’s board in September and will step down from the former company to dedicate sufficient time to the new job. Murphy replaces John Allan, who left Tesco last month after misconduct allegations. The market liked the news – the shares rose by over 1 per cent in early trading.
Tesco is amongst the big supermarkets accused of pumping up its fuel margins because of limited competition. The Competition and Markets Authority is due to shortly publish its final report from its investigation into fuel ‘greedflation’ in the retail market. CA
Read More: Companies roundup: Tesla sales boom & Astra’s underwhelming trial