Tesla CEO Elon Musk says the electric carmaker may continue to drop costs because the global economy is in “turbulent times.”
The multibillionaire made his remarks after the company disclosed that profit margins had been squeezed due to fierce competition.
Tesla has reduced its prices in important regions such as the United States and China multiple times in recent months.
In New York after-hours trading, the company’s stock dropped by more than 4%.
Tesla announced that its profit margin has dropped to its lowest point in four years.
According to the corporation, its gross profit margin decreased to 18.2% in the three months ending in June, down from 26.2% in the same time last year.
During a conference call with Wall Street investors, Mr Musk indicated that he was willing to lower prices even further if necessary.
“One day it seems like the world economy is falling apart, the next day it’s fine. I don’t know what the hell is going on,” he said.
“We’re in, I would call it, turbulent times,” Mr Musk added.
Investors are concerned about the possibility of more price cuts at Tesla, Arun Sundararajan, a Professor at the NYU Stern Business School, told the BBC.
“This feels like a price war with no long term strategy to raise margins if Tesla wins the war,” he added.
Mr Musk stated earlier this year that seeking bigger sales with lesser earnings was the “right choice” for Tesla.
To compete with competing manufacturers, the company has reduced pricing in markets such as the United States, the United Kingdom, and China.
The company announced earlier this month that it delivered a record number of automobiles in the three months ending in June.
It comes as more automakers have agreed to use Tesla’s EV charging system.
Nissan announced on Wednesday that its EVs in the United States and Canada will be outfitted with Tesla-developed charging points beginning in 2025.
Jérémie Papin, chairman of Nissan Americas, stated that the company is committed to “making electric mobility even more accessible.”
The announcement follows similar moves by US car manufacturers Ford and General Motors.
