Tesla’s financial performance in the first quarter of 2023 has raised concerns among analysts.

Despite reporting an increase in automotive gross margin, the company missed expectations for both earnings and revenue.

One key factor affecting Tesla’s performance is the delay in production of its affordable “mini car.”

Analyst Craig Irwin Roth believes this was a strategic blunder and is crucial for Tesla’s growth.

Roth expects the company to prioritize bringing the mini car to market as soon as possible, even if it means sacrificing some automation in production.

Regarding Tesla’s focus on Robotics and AI, Roth remains skeptical about the impact it will have on the company’s overall narrative.

He believes the main focus should remain on core automotive technology and market penetration.

Roth highlights Thailand as a potential game-changer for Tesla’s supply chain.

By establishing a manufacturing presence there, Tesla could benefit from lower costs and increased production volume.

Despite the challenges, Roth remains neutral on Tesla’s stock with a price target of $85.

He emphasizes that the company’s valuation should not exceed Toyota’s, given that Tesla lacks any inherent advantage over the Japanese automaker.

Roth anticipates further price cuts and margin pressure in the coming months.

In addition, Tesla’s first quarter free cash flow was a negative $2.5 billion, falling short of expectations for positive cash flow.

This shortfall is attributed to Tesla missing production targets and having to spend more on inventory management.

Tesla missed expectations for both earnings and revenue due to delay in production of affordable “mini car”

Tesla initially planned to launch its affordable “mini car” in 2023, however, the production has been delayed.

Analyst Craig Irwin Roth believes this delay is a strategic blunder and is crucial for Tesla’s growth.

Roth expects the company to prioritize bringing the mini car to the market as soon as possible, even if it means sacrificing some automation in production.

Roth remains skeptical about the impact of Tesla’s focus on Robotics and AI

Tesla’s focus on Robotics and AI is seen as a distraction and not having a clear impact on the company’s overall performance.

Roth believes the main focus should remain on core automotive technology and market penetration.

Roth believes that Tesla should concentrate on its core strengths and technologies like electrification and autonomous driving.

Tesla’s first quarter free cash flow was a negative $2.5 billion, falling short of expectations due to missed production target

Despite increasing its production capacity in the first quarter of 2023, Tesla fell short of its targets.

Due to this, Tesla had to spend more on inventory management.