This week in EVs: Tesla's terrible, no good week | Pro Recap

By Michael Elkins

Investing.com -- Here is your weekly Pro Recap of the past week's biggest headlines in the electric vehicle space: an earnings miss and angry workers at Tesla; a vow from Nio; and a delisting at Lordstown.

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Elon Musk to prioritize growth ahead of profit as margins shrink

Tesla (NASDAQ:TSLA) shares dropped like a stone after earnings missed Wall Street estimates, as margins were hurt by price cuts. Tesla cut prices worldwide on its electric vehicles, including in the U.S., where it recently slashed them for the sixth time this year amid rising competition.

CEO Elon Musk doubled down on the price war, saying the company would prioritize sales growth ahead of profit.

Tesla said its operating margins "reduced at a manageable rate" despite the price reductions. It also said its Cybertruck remains on track to begin production later this year.

On Thursday, Tesla’s website showed that the EV company raised prices on its Model S and Model X vehicles sold in the U.S. However, they are still 20% lower than at the start of the year.

Shares of TSLA ended the week at $165.08. A 12.3% drop off its weekly high of $188.3 achieved on Monday.

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Angry Tesla Shanghai workers take to social media

Prior to the disappointing earnings, Tesla received some unwanted attention this week when workers at the electric automaker’s Shanghai plant took to social media following cuts to their performance bonuses. The same plant whose workers Musk praised last year for burning "the 3 a.m. oil" to keep operations running during the city's two-month COVID lockdown.

The posts began appearing on forums late last week. Some took to Twitter to plead to the billionaire.

"Please pay attention to the performance (bonus) of frontline workers at Tesla's Shanghai factory being arbitrarily deducted," said @AFeiywu in a tweet directed at Elon Musk and Tesla's Asia unit.

Several posts said they believed the deductions were linked to a fatal accident earlier this year at the plant. The workers said that, when they asked Tesla supervisors about reasons for the bonus cut, those supervisors mentioned a "safety incident."

Musk responded to a post about this story by @Investingcom on Twitter Monday, saying:

Was alerted this weekend. Looking into it.

— Elon Musk (@elonmusk) April 17, 2023

However, an emergency bureau recommended an unspecified penalty for Tesla, according to media reports, after it inspected the plant after the February 4 death of a worker there.

According to the report, from Shanghai Pudong New Area Emergency Management Bureau, the worker didn’t lock a safety gate during a late shift, and another employee failed to make sure the area was clear of people before turning on equipment that crushed the 31-year-old employee. That employee died later at a hospital.

The report was removed from the bureau’s website after Tesla alleged that the report contained photos of the automaker’s production process.

NIO ‘will certainly not join the price war’: CEO William Li

Elsewhere in the EV space, on Tuesday William Li, CEO of Chinese electric automaker Nio (NYSE:NIO), said on CNBC that his company will focus on improving its customer service rather than cut prices.

“For us, we will certainly not join the price war,” CEO William Li said, according to a translation of the interview, claiming Nio’s products and services are worth the price.

Nio’s revenue comes primarily from China, where government policies have helped accelerate growth in electric-car sales. New energy vehicles saw penetration of passenger-car sales reach 34% in March. Faster than Nio anticipated, Li said.

In New York, NIO ended the week down 12.7% at $8.28 per American depositary receipt (ADR) - 17% off its Monday high of $9.98 - in possible sympathy with Tesla's slide.

Lordstown resumes production of Endurance, receives delisting notice

Ohio-based Lordstown Motors (NASDAQ:RIDE) said Tuesday that the electric startup has resumed production of the company’s Endurance electric pick-up truck following a pause in February.

The news gave a slight boost to shares, but not enough to avoid a delisting notice on Thursday - which came because the company's class A common shares closed below the minimum required price of $1 per share for 30 straight sessions.

The automaker said it is exploring all options, including a reverse stock split, and put in a proposal to be voted on at its May 22 annual shareholder meeting.

The notice has no immediate impact on the company's stock listing, and Lordstown Motors will have until Oct. 16 to regain compliance with Nasdaq's rules.

Shares of RIDE ended the week at $0.4826. A 15% drop off its weekly high of $0.5677 achieved on Tuesday.

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