Tesla gross margins missed investor expectations, says Needham

Needham analyst Chris Pierce keeps a Hold rating on Tesla (TSLA) while noting that the company’s autonomous driving and robotics ambitions are “shouldering an even heavier load”. Tesla’s saw record delivery volumes and upside margin surprise in Q3, but its 13% gross margins missed investor expectations as lease promotions in particular appear to have weighed on margins – a newer strategy within the company’s consistent willingness to sacrifice margins for unit growth, the analyst tells investors in a research note. Needham adds that it sees a continued ramp in new vehicle promotional activity across the industry in FY25 given the ramp in US inventories, potentially putting further pressure on margins.