The carmaker has published its quarterly figures.
(Photo: AP)
san francisco The price war for e-cars that he himself instigated is affecting Tesla. The company announced on Wednesday after the US market close for the second quarter that profitability (gross margin) fell to 18.2 percent from 19.3 percent in the previous quarter. That’s the lowest reading in 16 quarters. However, the company of SpaceX boss and Twitter owner Elon Musk exceeded sales expectations with 24.9 billion dollars. Experts surveyed by Refinitiv had expected almost 24.5 billion.
Net income was $3.15 billion. Tesla shares were initially a good two percent down in after-hours trading, but then went on to gain two percent.
Tesla’s profit margins have long been the envy of the auto industry. However, the electric car pioneer has started a price war for electric cars, which is particularly raging in China. Tesla also lowered prices several times in the USA. The group uses its high profitability to defend itself against competition from established car manufacturers, who are bringing more and more electric cars onto the market. In China, there is also the rise of companies such as BYD, now number one in the world’s largest car market. As a result of the discount battle, many electrical start-ups in the People’s Republic are threatened with financial difficulties, report industry representatives. But big car manufacturers like Volkswagen and Mercedes-Benz are also groaning.
Meanwhile, Tesla has slowed the pace of price cuts, instead offering discounts on stock-produced vehicles. In the second quarter, the carmaker delivered a record 466,140 vehicles, beating market estimates. In the United States, government subsidies that made e-cars more affordable also contributed to this.
Most recently, Tesla rolled out a program that gives buyers a discount if they buy a Model 3 and Model Y vehicle based on a customer’s recommendation. The program has been rolled out in Tesla’s largest markets including the US, China, Germany, France, Canada, Mexico, Hong Kong and Singapore.
Meanwhile, Tesla is pushing ahead with its expansion and submitted an application to expand its gigafactory in Brandenburg. The aim is to double the capacity of the Grünheide plant to one million vehicles.
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