According to Elon Musk, Tesla has delivered a record number of vehicles since the price reductions.
Tesla, the electric car manufacturer, announced that it achieved a record-breaking number of vehicle deliveries in the second quarter of the year by implementing price reductions to drive sales. The company has strategically lowered prices in key markets such as the US, UK, and China in order to maintain competitiveness against rival manufacturers. This move has proven successful, as Tesla reported delivering 466,140 vehicles during the three-month period, marking an increase of over 80% compared to the same period the previous year. Additionally, Tesla stated that it had ramped up vehicle production to nearly 480,000 units in the same timeframe.
Tesla’s price cuts in China, its second-largest market after North America, have yielded particularly positive results. Dan Ives from investment firm Wedbush Securities noted that the price reductions in China were a clever strategic move that greatly benefited Tesla.
China poses strong competition for Tesla, given the presence of local electric car manufacturers. Over the weekend, major Chinese automakers, including Li-Auto, Nio, and Xpeng, also reported a surge in sales during June, setting new delivery records.
Despite its successes, Tesla faces challenges from increased competition in various regions worldwide and the impact of higher borrowing costs for customers. In response, the company has adjusted prices throughout the year. In April, Tesla announced that it had no plans to stabilise vehicle prices, even though the repeated price cuts had affected profits.
While the company reported a revenue increase of almost a quarter in the first quarter compared to the previous year, its profit for the same period dropped by 24% due to price cuts and higher costs of raw materials and commodities.
Tesla is scheduled to release its financial results for the second quarter on July 19, which will provide further insights into the company’s performance during this period.