Tesla’s Most Crucial Metric Drops to the Lowest in Three Years

(Bloomberg) -- The metric Tesla Inc. told investors early last year was most important to its executives is in steady decline.

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The carmaker reported this week that its operating margin shrank to 5.5% in the first quarter, the lowest since the last three months of 2020. The measure of profitability was at 16% when Zachary Kirkhorn, Tesla’s then-chief financial officer, said during an earnings call that it was key to the company.

“As a management team here, we’re most focused on what our operating margin is,” he said in January 2023, in response to an investor question on a different earnings metric. “That is what we’re primarily managing to now.”

Read more: Can Musk’s Robotaxi Dream Fix What’s Ailing Tesla?: QuickTake

Tesla shares have nevertheless soared since the company reported its latest results, after Chief Executive Officer Elon Musk teased plans to put less-expensive vehicles into production as soon as late this year. The stock jumped 18% in the two sessions following the carmaker’s earnings release and rose as much 1.1% as of 1 p.m. Friday in New York trading.

Kirkhorn resigned as CFO in August of last year.

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