Musk’s electric car price war causes dent in Tesla’s standing

Tesla has reported record revenues, although profits have come under pressure as the company engages in a fierce price war with its competitors. Despite delivering a record number of vehicles, Tesla has been forced to offer significant discounts on its electric cars as rivals, including China’s BYD, gain ground in the market. Tesla’s operating margin for the three months ending in June dipped to 9.6%, compared to 11.4% in the previous quarter and 16% during the Christmas period. Gross profit remained flat at $4.5 billion, with the company citing cost-cutting measures as the reason for steady profits.

The electric car industry as a whole has faced challenges due to a dip in demand amid the global economic slowdown and a saturated market. Despite sales of electric vehicles still increasing sharply, the premium price of electric cars and rising electricity costs have dissuaded many consumers from upgrading. Tesla CEO Elon Musk, who also heads Twitter, SpaceX, and an artificial intelligence venture, has faced criticism for potentially spreading himself too thin among different ventures.

However, Tesla’s share price has surged in 2023, more than doubling and valuing the company at over $935 billion. The company has also seen revenue growth from its charging network through collaborations with rival car makers such as GM and Ford. Furthermore, Tesla’s energy storage arm has experienced a 74% increase in revenues compared to last year. Additionally, The Telegraph reported last week that Tesla plans to register as an electricity supplier in the UK and offer its Powerwall home battery pack to households, which charges during off-peak hours and utilizes the stored energy during periods of higher cost.