Price cuts take toll on Tesla profit as sales soar

Price cuts take toll on Tesla profit as sales soar

Tesla last night admitted profits are being hit as it cuts prices to boost sales.

The electric car maker said revenues rose to £19billion in the second quarter of the year – up 47 per cent on the same period 12 months earlier.

But having reduced the price of a number of its vehicles to boost sales, profits rose by a smaller but still impressive 20 per cent to £2.1billion as margins were hit.

Tesla said revenues hit £19bn in the second quarter of the year – up 47% on the same period 12 months earlier

The figures came after Tesla this month announced record car deliveries for the second quarter as it ramped up the price war in the electric car market.

Elon Musk’s firm delivered 466,140 cars in the three months to the end of June, higher than predictions of 445,000 and up from 422,875 in the first quarter. 

Production also increased to 479,700, compared with 440,808 in the first quarter.

Most of the vehicles were Tesla’s cheaper Model 3 and Model Y cars, which made up 446,915 of total deliveries. 

Musk plans to sharply increase sales at Tesla this year despite concerns about the company’s limited product range as well as tough competition in China.

The company last month announced a deal with General Motors (GM) to allow drivers to use 12,000 Tesla superchargers via an adapter starting next year.

And the firm embarked on an aggressive price-cutting campaign in January and has increased incentives to lure customers.

The prices changes have caused some backlash amongst drivers who say they were ‘duped’ by the company into taking early delivery of their cars in December, weeks before the brand started to slash the price of its vehicles.