Tesla announced that it would lower the prices for the vehicles again. The move comes despite price wars with other automakers, which are weighing on the company's own margins. Tesla has cut prices several times in the US, China and other markets since late last year.
In a nutshell: Tesla CEO Elon Musk signaled on Wednesday that he would cut EV prices again, and in "turbulent times." At the same time, the company is fighting automobile manufacturers with its price war and is feeling the pressure on its own margins Reuters reported.
- Tesla is cutting prices as a stimulus to deal with competition and economic uncertainty
- Focus on cost reduction and development of new products despite low margins
- Progress in Cybertruck production and negotiations on licensing of “Full Self Driving” (FSD) software
Price reductions are intended to create incentives
Since the end of last year, Tesla has repeatedly cut prices in the U.S., China and other markets and increased rebates and other incentives to cushion competition and economic uncertainty. Musk said at an analysts' conference: "One day the global economy seems to fall apart, the next day everything is fine. I don't know what the hell is going on. We are in turbulent times.”
challenges and achievements
Tesla reported a total gross margin of 18,2% in the April-June period, the lowest in 16 quarters. The company stressed that it is focused on cutting costs and developing new products and that the challenges of these uncertain times are not over. Although the sharp price cuts weighed on Tesla's gross profit in the automotive division, Musk reiterated that Tesla would sacrifice margins in favor of higher sales.
Focus on cost reduction and new products
Tesla reiterated its expectations to deliver around 1,8 million vehicles this year, but said production would decline slightly in the third quarter due to planned shutdowns for factory expansion. Lower prices and government tax incentives for purchasing electric vehicles led to record sales of 466.000 vehicles worldwide in the April-July period, but these developments came at the expense of profitability.
Progress in production and delivery
Tesla announced that production of the long-awaited Cybertruck electric pickup truck remains on schedule for first deliveries this year. Musk also mentioned that Tesla is negotiating with a major original equipment manufacturer to license its Full Self Driving (FSD) software. Tesla had previously stated that it was open to licensing the driver assistance system.
