Tesla’s first-quarter revenue has seen a significant decline, with a year-on-year decrease that is the highest since 2012. The gross margin has also been consistently decreasing and is now at only 17.4%. The decrease in vehicle deliveries due to the Model 3 updates at the Fremont factory and production interruptions at the German factory, coupled with competition from Chinese car manufacturers, has forced Tesla to lower prices in response. The operating margin has dropped to 5.5%. However, revenue from energy storage and services continues to grow, although its contribution to the overall revenue is relatively small at present.
Tesla's Financial Report Falls Short, Musk Cuts Costs and Accelerates Launch of Affordable New Car