Tesla’s Musk fine with taking this risk if it means higher production

Tesla CEO Elon Musk said during the company’s Q2 2023 Earnings Call on Wednesday that it “makes sense to sacrifice margins in favor of making more vehicles,” hinting toward more price cuts even as economic times are uncertain.

This year, Tesla has used price adjustments to stimulate demand and increase orders for its vehicles. Although Tesla said it did not have a specific strategy for its price cuts other than normal analysis on a somewhat regular basis, it seems it continues to adjust numbers based on how many people are ordering.

It used a monumental price cut at the beginning of the year to maintain an advantage over the influx of competitors that have entered the market over the past year. And with its Supercharger Network being opened to various automakers who have chosen to adopt the company’s NACS connector, price cuts are where Tesla is taking it to the competition.

Still, Musk and Co. reiterated on the call yesterday after market close that, despite challenging economic conditions, it is ideal to cut prices and sacrifice margins if it means upping production:

“I think it makes it does make sense to sacrifice margins in favor of making more vehicles.”

Musk also said there would be lower prices in unstable market conditions:

“If market condition is stable, I think prices will be stable. If they’re not stable, then we would have lower prices. Yes.”

Tesla has continued to cut prices through Q2, and, while it is unknown if things will change in Q3, it seems relatively certain things will continue to change based on Musk’s comments regarding market stability.

Tesla Model Y price cuts have brought costs below U.S. average

Analysts have also predicted Tesla will continue to cut prices.

Please email me with questions and comments at joey@teslarati.com. I’d love to chat! You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.

Tesla CEO Elon Musk says risky margin sacrifice ‘makes sense’ to up production


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