Why Tesla Stock Is Trading Lower Thursday

Tesla Inc TSLA shares are hitting the brakes in early trading Thursday. All eyes were on margins heading into the print given the recent string of price cuts from the EV maker. Margins continued to trend lower.

What Happened: Tesla turned in first-quarter revenue of $23.33 billion, which was up 24% year-over-year and came in ahead of estimates of $23.29 billion, according to Benzinga Pro. The company reported quarterly earnings of 85 cents per share, which was in line with consensus estimates.

First-quarter vehicle production totaled 440,801 vehicles, representing a 44% increase year-over-year. Deliveries were up 36% to 442,875. The company had a total of 4,947 Supercharger locations at the end of the quarter.

Operating margins were 11.4% in the first quarter, which appears to be driving shares lower Thursday. For comparison, margins came in at 16% in the fourth quarter and 19% in the same quarter last year. 

According to CNBC, gross auto margins excluding credits came in at 19%, but analysts were anticipating 20.5% and Tesla had previously guided above 20%. 

Tesla has cut prices several times in recent months and did so again a little over a week ago. 

"In the current macroeconomic environment, we see this year as a unique opportunity for Tesla. As many carmakers are working through challenges with the unit economics of their EV programs, we aim to leverage our position as a cost leader," the company said. 

Everything You Need To Know: Tesla Q1 Earnings Highlights: Revenue Beat, EPS In Line, Cybertruck Update, Model Y Bestselling Vehicle And More

Earnings Call: On the conference call with analysts and investors, CEO Elon Musk said the company believes pushing for higher volumes and lower margins is the right approach. 

"This is a good time to increase our lead further and we will continue to invest in growth as fast as possible," Musk said on the call. 

The Cybertruck is still on track to begin production later this year and Musk noted that a delivery event is expected in the third quarter. Musk also said that he believes the company can deliver on Full Self-Driving sometime in 2023. 

TSLA Price Action: Tesla has a 52-week high of $363.50 and a 52-week low of $101.81.

The stock was down 7.81% at $166.44 at time of publication, according to Benzinga Pro.

Photo: courtesy of Tesla.