Tesla (TSLA) on Wednesday, April 19, reported Q1 net income of $2.51 billion, down 24% from a year earlier, as the company's electric vehicle pricing strategy hurt profits.

The world’s most capitalized EV carmaker has repeatedly lowered the prices of its 4 flagship electric vehicles – the Model S, Model X, Model Y and Model 3 – in the U.S., Europe and China. The strategy helped boost its revenue, which hit $23.3 billion in Q1, up 24% from a year earlier. In Q1 2023, Tesla’s car sales revenue — a figure including some $521 million in zero emissions tax credits — hit nearly $19.9 billion, posting an 18% increase YoY. However, that move expectedly suppressed TSLA’s margins, which most investors apparently didn’t like.

Tesla's operating expenses have been largely flat (down only 1% from Q1 2022), but its capital expenditures were up. The company reported capital expenditures of $2 billion in Q1, up 17% YoY. Meanwhile, operating margin fell to 11.4% over the period from 19.2% in Q1 2022.

Tesla CEO Elon Musk promulgated the company’s Master Plan Part 3 back in March 2023 at the company’s annual Investor Day. Much of the plan was focused on how Tesla’s commitment to clean energy toward renewable sources, and the automaker’s energy storage and powergen business becoming a big part of that plan, but didn’t say a word about the EV carmaker’s increased pressure from competition.

Indeed, over the reporting period, revenue from that side of the business increased 148% from the same quarter last year to a record $1.5 billion. Tesla also said it was escalating its energy storage production capacity at its Megafactory in Lathrop, California. The company also recently announced a new Megafactory in Shanghai that would enjoy 40 GWh of capacity, which construction was scheduled to begin later this year.

Tesla shares are apparently struggling lately and fell 7.8% in today’s, April 20, premarket trading.