Tesla Counts the Cost of Its Price War

It shouldn’t have been a surprise that big price cuts have a big impact on margins, but such is the magical thinking around Tesla that somehow it was.

The electric-vehicle maker reported an 11.4% operating margin for the first quarter, down from 19.2% a year ago. Analysts were expecting 12.2%, according to FactSet. This was the performance metric Wall Street was most focused on after a series of aggressive price cuts by the company, and the stock fell about 4% in after-hours trading.