Elon Musk’s announcement discourages investors but pleases buyers.

The billionaire behind the electric car manufacturer Tesla has revealed that the company was considering to continue reducing prices for its vehicles, in spite of pressure on profit margins amid tough competition on US and Chinese markets. 

In a recent report, Tesla disclosed that its gross profit margin for the three months ending in June dropped to 18.2%, the lowest level in four years, down from 26.2% during the same period the previous year. During a discussion with Wall Street analysts, Elon Musk expressed openness to further price reductions if necessary, stating his uncertainty about the erratic state of the world economy. 

Investors are expressing concerns about the possibility of more price cuts at Tesla, fearing a potential price war without a long-term strategy to boost margins.

However, earlier this year, Musk defended the strategy of pursuing higher sales with lower profits as the right choice for Tesla. 

To compete with rival manufacturers, Tesla has already lowered prices in markets like the US, UK, and China. Despite the challenges, the company achieved a record number of vehicle deliveries in the second quarter of the year.

Moreover, Tesla's electric vehicle charging technology is gaining wider adoption, with major car manufacturers like Nissan, Ford, and General Motors planning to use Tesla-developed charging ports for their EVs in the coming years.

Overall, Tesla remains agile in response to the uncertainties in the global economy, and the company's willingness to adjust its pricing strategy indicates its determination to navigate the current challenges in the automotive market.

Must said earlier this year that the carmaker would release in 2023 new models for sale, including the anticipated Cybertruck.