Tesla reported a drop in first-quarter earnings Wednesday as price cuts at Elon Musk's electric vehicle company boosted demand but hit profit margins.
Profits came in at $2.5 billion, down 24 percent from the year-ago period on revenues of $23.3 billion, which were up 24 percent.
Shares fell on the results, which were in line with Wall Street expectations for earnings per share, but showed a lower profit margin than expected.
Faced with more EV competition from other automakers, Tesla has undertaken a series of price cuts in 2023, most recently over the last 24 hours on some models in the United States.
Investors who are bullish on Tesla's strategy see the price cuts as a way to grow its market share at a time when rivals are also ramping up production amid cost pressures.
The company said its profit margins had been trimmed at "a manageable rate," as it pointed to a "unique opportunity for Tesla" while signaling more price cuts ahead.
"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," Tesla's press release said.
Wall Street analysts were expected to focus on Musk's outlook for vehicle pricing on a conference call later Wednesday.
This includes questions about pricing strategy in China, the world's biggest EV market which is home to heavy competition from Chinese companies and other western automakers.
In its press release, Tesla said newer plants in Texas and Germany are ramping up. It also said factory tooling was on track for the Tesla "Cybertruck," an unorthodox model that has generated fanfare.
Tesla reaffirmed its 2023 target of 1.8 million vehicles.
The company has previously cited supply chain difficulties on semiconductors and key materials like lithium as a constraint on growth.
Wednesday's press release did not include an extensive discussion of these issues, but described higher raw material, commodity and logistics costs as a factor in lower profits.
Currently listed as the world's second wealthiest person behind LVMH Chief Executive Bernard Arnault, Musk has increasingly spread his efforts well beyond the auto sector.
Besides heading both Tesla and Twitter, Musk recently filed papers to establish the X.AI artificial intelligence corporation based in the US state of Nevada, according to business documents.
Musk is also the founder of SpaceX, which has scheduled for Thursday the first test flight of Starship, which is "designed to send astronauts to the Moon, Mars and beyond," according to the venture's website.
Shares fell 3.8 percent to $173.70 in after-hours trading.
