Tesla profits halve as demand plummets amid price war with Chinese rival BYD

Elon Musk warned that car production will slow this year at Tesla as the firm posted a sharp drop in profits.

The US company, which is the second largest electric car maker in the world, reported profit of £1.6billion for the final three months of last year compared to £3bn in the previous year.

Fourth-quarter revenue rose to £19.7billion – an increase of 3 per cent– but its slowest pace of growth in more than three years. 

The electric carmaker said its vehicle volume growth rate ‘may be notably lower’ than 2023, saying workers at its factory in Texas will be focusing on the launch of its next vehicle. 

Last night’s figures come after Tesla slashed the price of its most popular car Model Y in Europe and China this month amid a price war with rival BYD.

Profits hit: Tesla boss Elon Musk (pictured) has warned that high interest rates have led to more subdued demand, prompting the electric car firm to offer cheaper deals

The Chinese giant last year knocked Tesla off the top spot to become the biggest maker of zero-emission cars in the world.

Musk has warned that high interest rates have led to more subdued demand, prompting Tesla to offer cheaper deals.

Investors have also expressed concerns that Musk, one of the world’s richest men, is spreading himself too thin across his multiple business ventures.

He owns Twitter – which he renamed X – after a disastrous $44billion buyout in 2022. 

As well as the social media platform, Musk runs infrastructure firm the Boring Company and rocket maker SpaceX.

Musk was recently rocked by claims in the Wall Street Journal that he was a frequent user of illegal drugs including LSD, cocaine, ecstasy and magic mushrooms. It reported that SpaceX executives were concerned the billionaire was on drugs during a meeting in 2017.

He denied the bombshell report and Nasa confirmed that there was no evidence of drug use at SpaceX.

Tesla is planning to start production of a mass market electric vehicle affordable to millions of drivers. Musk has long whetted the appetites of fans and investors with the promise of a cheaper range of Tesla cars.

Plans being drawn up under the codename ‘Redwood’ could see a more affordable model start production in mid-2025.

The entry-level vehicle would still cost $25,000 (£20,000), according to Reuters.

Read more at DailyMail.co.uk