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The New York Times –

Despite a series of price cuts that reduced the amount of revenue per vehicle sold, Tesla reported a much bigger profit increase than expected.

Tesla’s (TSLA) second-quarter adjusted earnings increased 20% from the second quarter last year to $3.1 billion, or 91 cents per share. According to Refinitiv, analysts expected earnings per share of 82 cents.

As a result of the series of price cuts announced by the company since earlier this year, its profit margin was also better than expected at 18.2%. When Tesla first began to lower prices, its profit margin was 25%, and it even reported a 19.3% profit margin in the first quarter. However, it was predicted that the recent quarter’s profit margin would be under 17% due to the continued price cuts.

Revenue from automotive sales excluding regulatory credits increased by 47%. This was still far less than the 83% increase in vehicle sales, an indication that Tesla continues to reduce the cost of its cars to drive greater demand.

In addition to competition from established automakers, rising interest rates, and economic uncertainty, the company cut prices as its EV offerings faced increased competition.

The company said in a statement that its operating margins remained healthy despite price reductions during Q1 and early Q2. It achieved this by reducing costs, ramping up production at factories opened last year in Germany and Texas, and delivering strong performance in its other businesses.

The company’s earnings statement stated, “The challenges of these uncertain times are not over, but we believe that we have the right ingredients for achieving long-term success.”

A total of 1.8 million vehicles are expected to be sold this year, which would be 37% more than in 2022.

It warned that summer shutdowns of its assembly lines would affect third quarter production. According to the company, upgrading its factories was a necessity.

According to Tesla CEO Elon Musk, the company is in “early” talks with another major automaker about licensing its “full self-driving” (FSD) technology.

As a result, we aren’t keeping this to ourselves. Musk said he would be happy to license it to others without providing any details about its application.

Virtually all major automakers are introducing driver assist options, such as technology to keep cars at a safe distance from the cars in front of it them and automatic breaking to avoid obstacles. Nevertheless, Tesla has been aggressive in claiming that its technology allows cars to essentially drive themselves, even if drivers must remain alert. It costs $15,000 for Tesla drivers to have FSD capability in their cars.

While in FSD mode, numerous Tesla vehicles have crashed, including hitting emergency vehicles at accident scenes. Following an investigation by the National Highway Traffic Safety Administration, the company recalled all 363,000 US vehicles equipped with its FSD software in February.

During the Wednesday call, Musk maintained that cars in FSD mode are already safer than humans. Due to the enormous amount of data collected from cars driven in FSD mode, FSD keeps getting better. There have been 300 million miles driven in FSD so far.

The 300 million miles will seem small very soon. The number of miles will soon reach billions or even tens of billions,” he predicted. FSD will become vastly better than humans as it advances from being as good as humans. There is a clear path to full self-driving being 10x safer than the average human driver.”

On the call, Musk admitted Tesla’s FSD mode has not yet met Musk’s predictions.

As the boy who cried FSD, I am who you are looking for. My prediction is that we will be better than humans by the end of this year. “That doesn’t guarantee we’ll be approved by regulators,” he said. “I’ve made mistakes in the past. This time, I may be wrong.”

After closing down 1% on the day before the report, Tesla shares dropped about 2% after hours. Through Wednesday’s close, the stock has gained 136% this year, a dramatic turnaround from last year’s 65% drop.