Tesla achieved impressive quarterly profits, surpassing expectations and indicating success in the electric-vehicle price war initiated by CEO Elon Musk. To combat competition and economic uncertainties, Tesla has implemented price cuts, increased discounts, and incentives to reduce inventory. These actions have affected the company’s automotive gross margin, but Musk is determined to prioritize volume growth over margins. As an example of this strategy, Tesla reduced prices on the Model Y long-range version by 25% to $50,490. Despite these challenges, Tesla remains focused on cost reduction, new product development, and navigating uncertain times. The automotive gross margin, excluding regulatory credits, declined to 18.1% in Q2 compared to 19% in Q1. In comparison, it was 26% a year ago. Musk has doubled down on the price war, aimed at strengthening Tesla’s position in the market. Wedbush analysts believe Tesla’s aggressive price cuts have given them an advantage to further capitalize on their success. While Tesla’s stock remained flat after the announcement, the company reiterated its goal of delivering approximately 1.8 million vehicles this year. Tesla faced difficulties in China due to the lack of new models, resulting in local competitors stealing market share. Lower pricing, along with government incentives globally, contributed to a record 466,000 vehicle deliveries in the April-July period, but impacted profitability. However, on an adjusted basis, Tesla earned 91 cents per share, surpassing analysts’ expectations of 82 cents per share and reporting revenue of $24.93 billion, exceeding estimates. Tesla’s stock received a significant boost after securing charging technology deals with major automakers and EV charging firms. The stock has risen 60% since the Ford deal in May and a total of 138% this year, aided by federal credits for Model 3s and investor enthusiasm for AI. Tesla attributed lower raw-material costs and government tax credits to reduced cost-per-vehicle, but faced increased operating expenses due to the Cybertruck, AI projects, and battery cell production ramp-up. Tesla remains on track to deliver the highly anticipated electric pickup truck, Cybertruck, this year. However, it has faced delays due to component sourcing challenges. Tesla claims notable progress in the production of its 4680 battery cells, although further details were not disclosed. In 2020, Musk introduced the plan to produce Tesla’s own EV batteries, known as “4680” cells, but the company has struggled to meet production and performance targets.
Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
