Tesla advertises its cars as having a smooth ride, but following the prices for its vehicles has been anything but. Tesla has dropped prices multiple times over the past six months, and then in April, it raised the prices of its two most expensive models.

Tesla is going to be “more disruptive than they used to be,” Yen Chen, senior industry economist at the Center for Automotive Research, told CFO Brew, with a goal to “take as much of the market share” as they can.

Chen noted that Tesla currently has ~4% of the US market in automobiles, after being in the US market for about 15 years, comparing them with Subaru, which has a similar share of the US market, despite coming to the US in 1968.

“For a new company in the automotive industry—a 15-year-old company—[to] pick up 4% of the market share in the US is very, very impressive,” Chen said.

Tesla has long generated far-higher profit margins on its cars than the average manufacturer. Despite shrinking operating margins significantly—from 19.2% in the first quarter last year, to 11.4% in the quarter just passed—the company still stands far above Ford and General Motors, with margins of around 4% and 6.6%, respectively.

For this reason, Yen thinks, Tesla can discount its vehicles and still grow its market share significantly.

Continue reading.—SW

Generative AI has entered the chat, bringing rapid changes and doing everything from writing website copy to sales emails. But what does the AI-enabled future hold for accounting? Come to Klarity’s summit on May 24 to find out.

According to Accenture, 98% of executives agree that AI will play a strategic role in their organization over the next 3–5 years. And Klarity is bringing together CAOs, CFOs, and accounting thought leaders in sunny San Jose to figure out what that means for the world of accounting.

Throughout the 1-day summit, accounting leaders—including Jannie Affeld, VP of Finance Systems at Google as one of the keynote speakers—will explore the role of generative AI in:

• foundational models and extensibility
• accounting workflows
• autopilot vs. copilot

Use code GENAICOMP at checkout for 100% off your tickets. Reserve your seat.

C’mon, we’ve probably all made accounting mistakes, but we’re betting that you’ve probably not made any that might impact the balance of a war. But that’s exactly what happened recently, Pentagon sources told the Wall Street Journal.

A valuation error opened up an additional $3 billion of military aid to Ukraine, allowing the Biden administration to potentially circumvent the need to ask Congress for more funding for the war effort.

Apparently, the military used “valuations for new equipment instead of the older gear pulled out of US stockpiles,” which inflated the value of the aid by $3 billion, according to what sources told the WSJ, which broke the story.

“In some cases, ‘replacement cost’ rather than ‘net book value’ was used, therefore overestimating the value of the equipment drawn down from US stocks,” Pentagon spokeswoman Sabrina Singh told the WSJ.

Keep reading.—DA

If you’re reading this quickly while waiting for a video game to load, you’re far from alone. Several titans of the gaming world impressed with earnings last week, which sent their stock prices up.

Revenues beat expectations for Roblox, Tencent, and Unity. That comes on top of a beat for Take-Two Interactive in March.

But video game hardware companies are having a harder time. Nintendo, whose fiscal year ended March 31, sold 5 million fewer Switches over the past year than it did in the prior year. Microsoft, which reported at the end of April, saw video game revenues drop 4% year over year, but within that number was a clear divide in different sources of gaming revenue: Xbox’s content and services grew 3%, while hardware revenue dropped 30%.

All of this comes after a gaming revenues slump in 2022, with the end of a pandemic-driven gaming boom.

Continue reading.—SW

Today’s top finance reads.

Stat: $14.3 billion. That’s how much EU competition regulators are trying to get Apple to pay Ireland in back taxes. Regulators are appealing an EU court decision that found the tech company’s tax deal with Ireland did not unfairly advantage Apple. (Reuters)

Quote: “I would attribute a large portion of that national decline in accounting enrollments to the general reluctance of public accounting firms to significantly increase starting salaries. Over the last eight to 10 years, starting salaries have not kept pace with these really cool emerging fields, like data science.”—Michael Donohoe, head of the department of accountancy and professor of accountancy at the University of Illinois Urbana-Champaign, on what’s driving the decline in new accountants. (the Wall Street Journal)

Read: Prosecutors say they have a lot of evidence against Sam Bankman-Fried and FTX. (the New York Times)

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