Tesla (NASDAQ: TSLA) reported its earnings for the first quarter of 2023 last night, and analysts kept a close eye on margins as price cuts continued to plant seeds of uncertainty in their minds.
Analysts were fixated on the 20-plus-percent margin level and whether Tesla’s strategy of cutting prices to undercut competitors and make its vehicles more affordable would hurt the company’s balance sheet.
Tesla (TSLA) Q1 2023 earnings results: $23.3B in revenue, 19.3% non-GAAP gross margins
While automotive gross margin came in at 19.3 percent, with Wall Street expecting 20.7 percent, analysts like Dan Ives of Wedbush highlighted that the price cuts were used to “further stimulate consumer demand in a shaky macro amidst rising EV competition globally in this EV arms race.”
Tesla called its drop in operating margins “manageable” as it expects to rebound through improved production efficiency at its newest factories, as well as lower logistics costs and scaling. Its factories in Texas and Berlin have ramped up production rates on several occasions thus far in 2023 already, and as manufacturing continues to grow at those factories, Tesla will also increase its annualized build rates with a new plant in Mexico.
Wedbush is still bullish on Tesla long-term, and its “near-term margin pain for long-term demand/volume gain” is something Wall Street firms are aligned with as well. However, Ives writes that Tesla dipping below the 20 percent margin “is a concern,” although he also notes that between 16 and 18 percent was where bearish estimates left the company.
As Tesla mentioned in its Q1 shareholder deck, the drop is something it anticipated and is “manageable.” Wedbush’s note states that Tesla is comfortable with a sub-20 percent rating because it is confident it will rebound through the next few years. However, it is aware of the risks that come with the price cuts:
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“With no rose-colored glasses: margins are now a delicate issue that are keeping Tesla investors up at night.”
Tesla is also aware of the risks as companies attempt to operate at lower margins, noting during the call that new automakers fail because their ability to operate falters at lower margins. Musk said via (Seeking Alpha):
“Actually, this one — assuming I could wax on about for a while because really, people didn’t understand that the best short-selling argument against Tesla for the longest time was the fact that Tesla does not have an existing fleet and that the auto industry, the reason incumbents succeed and newcomers fail, the biggest reason is that the incumbents have a large fleet, and they’re able to sell new cars at close to zero margin and then sell spare parts at a very high margin, sort of razors and blades type thing. And so the only way to actually succeed for a newcomer to succeed is to have a product that is so compelling that people are willing to pay a premium over the incumbent product.”
Nevertheless, Tesla’s long-term story is still something Wedbush looks at from a bullish perspective. The firm will pay attention to the margin compression and price cuts moving forward as they “now emerge as a clear overhang on the stock.”
Wedbush cut its price target from $225 to $215, but maintained its ‘Outperform’ rating on the stock.
Disclosure: Joey Klender is a TSLA Shareholder.
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SpaceX will report second quarter results after the market closes on Tuesday, August 4, marking the first time the company has opened its books to the public since its record IPO in June. Management will host a live audio only webcast at 4:30 p.m. ET, streamed on X, with no dial in option.
The debut carries more weight than a typical first quarter as a public company. Two trading days after the release, on August 6, the first tranche of SpaceX’s lockup expires, freeing roughly 911.5 million insider and employee shares, worth well over $100 billion at current prices and the largest such release in Wall Street history. A second, larger tranche tied to the stock trading 30 percent above its $135 IPO price never triggered, since shares have spent most of July trading below that price.
Wall Street’s models point to revenue near $6.9 billion for the quarter, up sharply from the $4.69 billion SpaceX reported in the first quarter, with a narrower per share loss than the $1.27 posted three months earlier, according to estimates compiled by Motley Fool. Those numbers will be the first look at how SpaceX’s three segments, Starlink, launch and AI, are performing independently.
SpaceX scores another massive Pentagon deal to support military satellites
Investors heading into the call have a specific list of questions. How many net new Starlink subscribers did SpaceX add after ending March with 10.3 million, and is average revenue per user holding up as the service expands into lower income markets. How much of the AI segment’s revenue reflects contract signings with Anthropic, Google and Reflection AI this year, deals that combined could annualize to nearly $28 billion if fully ramped. Whether capital expenditures, which nearly doubled in the AI segment alone between 2024 and 2025, are still accelerating or starting to plateau. And whether management offers any forward guidance at all, something SpaceX has never done publicly.
The report will also land days after Elon Musk publicly denied a Wall Street Journal report describing internal planning to separate Tesla’s China business ahead of a potential Tesla-SpaceX merger. Whether Musk or SpaceX executives address that speculation on the call, even indirectly, maybe something investors will be listening for on Tuesday.
As Teslarati reported after Musk’s own warning to short sellers last week, the CEO has made clear he expects skeptics to be proven wrong over time. Tuesday will be the first chance for the numbers themselves to make that case.
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Elon Musk
Tesla AI boss reveals how big Optimus is going to get
Tesla’s Optimus chief corrected himself on X, confirming a staggering 10 million robot production target.
![Tesla Optimus Gen 3 [Credit: Tesla]](https://www.teslarati.com/wp-content/uploads/2026/03/tesla-optimus-gen3-diner.jpg)
Tesla’s Optimus program has a new number attached to it, after Ashok Elluswamy, the executive who has run the humanoid robot program since June 2025, posted a three word correction on X Thursday, “Correction, 10 million robots.”
The line clarifies the long term annual capacity Tesla is building toward its planned second Optimus production line at Gigafactory Texas, a figure Musk has cited repeatedly since last year’s shareholder meeting.
The scale is worth noting, because ten million robots a year would mean Tesla building more units annually than most countries sell in new cars. Tesla has framed this as a second line, not the first. The buildout is happening in two phases: a roughly one million unit per year line inside Tesla’s Fremont factory, installed on the floor space vacated when Model S and Model X production ended earlier this year, and a much larger dedicated facility under construction at Giga Texas that broke ground on its first steel structure in May. That Texas facility is the one Elluswamy’s correction refers to, and is expected to reach volume production sometime in 2027.
Correction, 10 million robots https://t.co/0z4nyQNTzp
— Ashok Elluswamy (@aelluswamy) July 30, 2026
Tesla Optimus project fires up as Musk sees production line progress
Elluswamy took over Optimus from Milan Kovac last summer and has spent the months since talking up the program’s trajectory. Elon Musk has also floated the ten million figure at Tesla’s 2025 shareholder meeting.
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Ending Model S and Model X production to make room for the first Optimus line was one of the more consequential manufacturing decisions in the company’s recent history, retiring two flagship vehicles in favor of a robot that has yet to enter mass production. Musk has previously estimated per unit production costs at $20,000 to $25,000 once Tesla reaches a million units a year, though he hasn’t said what that cost looks like at ten times the volume.
SpaceX just picked up another $1.6 billion from the Pentagon, with the U.S. Space Force awarding two task orders worth $1.6 billion to fly 18 Falcon 9 missions from Vandenberg Space Force Base in California through the end of 2027. The launches will carry satellites for the Space Based Sensing and Targeting portfolio, a set of programs meant to help the military detect and track airborne threats and relay that information across forces in near real time.
The award falls under National Security Space Launch Phase 3 Lane 1, the Space Force’s faster, commercial style procurement track for missions that do not require the military’s most demanding certification process. It is also the largest single order publicly disclosed under that program so far, and the first task order issued since the Space Force nearly tripled Lane 1’s contract ceiling from $5.6 billion to $17 billion on July 17.
SpaceX to become America’s Military data backbone for missiles, drones, and warfighters
Eric Zarybnisky, the Space Force’s acting portfolio acquisition executive for space access, said the entire process, from identifying the requirement to signing the contract, took about two months, including a month set aside for companies to prepare proposals.
SpaceX is not just launching these satellites. It already holds the contracts to build two of the programs within the same portfolio, $4.16 billion for the Space Based Airborne Moving Target Indicator system and $2.29 billion for the Space Data Network Backbone, which Teslarati covered in May. That means SpaceX is now responsible for both building key pieces of the military’s next generation sensing network and getting them into orbit.
With this latest award, SpaceX’s Pentagon contract total for 2026 alone tops $8 billion, adding to a defense portfolio that already includes the Golden Dome missile defense software group SpaceX joined in April and a string of GPS launches it inherited after ULA’s Vulcan rocket ran into a booster anomaly, which we detailed in March.
Lane 1’s vendor pool technically includes seven companies: SpaceX, ULA, Blue Origin, Rocket Lab, Stoke Space, Impulse Space, and Relativity Space. In practice, SpaceX remains the only provider with the combination of launch cadence, flight proven Falcon 9 hardware, and West Coast infrastructure to support a campaign requiring roughly one Vandenberg launch a month for the next year and a half.
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Some lawmakers have flagged the growing concentration of national security launches with one company as a risk worth watching. For now, the Space Force keeps backing SpaceX, with it being the company that shows up ready to launch.
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