Price cuts take toll on Tesla profit as sales soar
Price cuts take their toll on Tesla’s profits as sales soar
Tesla admitted last night that profits are being squeezed as it lowers prices to boost sales.
The electric car maker said revenue rose to £19 billion in the second quarter of the year – a 47 per cent increase on the same period 12 months earlier.
But after the price of some of its vehicles was slashed to boost sales, profits rose by a smaller but still impressive 20 per cent to £2.1bn as margins hit.
Tesla said sales in the second quarter of the year were £19 billion – 47% more than the same period 12 months earlier
The numbers came after Tesla announced record car deliveries for the second quarter this month as it ramped up the price war in the electric car market.
Elon Musk’s company delivered 466,140 cars in the three months to the end of June, surpassing forecasts of 445,000 and more than the 422,875 in the first quarter.
Production also increased to 479,700, compared to 440,808 in the first quarter.
Most of the vehicles were Tesla’s lower-cost Model 3 and Model Y cars, accounting for 446,915 of total deliveries.
Musk plans to boost sales at Tesla this year despite concerns about the company’s limited product range and fierce competition in China.
The company last month announced a deal with General Motors (GM) that will allow drivers to use 12,000 Tesla superchargers via an adapter starting next year.
And the company began an aggressive price-cutting campaign in January and has increased incentives to entice customers.
The price changes have sparked some uproar among drivers who say they were ‘duped’ by the company into making early delivery of their cars in December, weeks before the brand began slashing prices on its vehicles.