Tesla's Margin Falls Short of Estimates, but Production Goal Remains on Track

Tesla's quarterly gross margin dropped to a more-than four-year low due to aggressive price cuts, missing analysts' expectations. However, the electric car maker remains committed to its annual production target, indicating strong demand. Tesla plans to continue cutting production costs to boost profits and has made upgrades to its factories in the third quarter to achieve this. Despite a reduction in raw material costs, margins fell due to underutilization of new factories and increased operating expenses. The company's shares were volatile in extended trading, and while it has begun pilot production of the Cybertruck, CEO Elon Musk cautioned that it will take time before it becomes a significant positive cash flow contributor.