Market share or margins, that seems to be the conundrum facing electric vehicle powerhouse Tesla.
Right now, it looks like the company’s competitive position is being prioritised over protecting profitability and only time will tell if that is the right move.
AJ Bell’s Russ Mould said: “With profit falling for the first time since 2019, Tesla is facing a race to reduce the costs of building its vehicles to support the mass-market appeal of its brand while also delivering the sort of returns expected by investors.
“The company is also taking the view that by building out an effective installed base of Tesla vehicles it is creating a larger pool from which to draw revenue from subscription services, parts and maintenance.
“While Tesla’s price cuts are raising eyebrows, it is a natural progression for the EV industry if it is truly to supplant combustion engines for price points to reach levels which are affordable for the average family.”
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