US electric car manufacturer Tesla delivered a record number of cars in the second quarter. Sales were boosted by price cuts in the United States, Britain and China, among other countries, which helped the automaker compete with other manufacturers. In total, the company delivered 466,140 cars, 83 percent more than a year ago. Tesla made the announcement late today.
The price cuts were key
Earlier this year, Tesla boss Elon Musk said he believed pursuing higher sales at lower profits was “the right choice” for the company.
The carmaker’s production has increased to nearly 479,700 units from 258,580 in the April to June 2022 period, helped by an increase in production capacity. The second quarter was the fifth consecutive quarter where the number of cars produced was higher than the number delivered.
Dan Ives, an analyst at investment firm Wedbush Securities, told the BBC that the price cut in China was “a smart poker move that has been massively successful for Tesla”. China is the carmaker’s second-largest market after North America and it faces stiff competition from local EV makers there.
But Tesla is also battling stiffer competition in other parts of the world. Rising borrowing costs are also taking their toll. These were the main reasons why it decided to cut prices.
Global growth
Tesla currently operates assembly plants in Freemont, California, Austin, Texas, and abroad in Shanghai and Brandenburg, Germany. The company also builds the Semi truck at a battery plant in Nevada, but deliveries of Semi models began in December 2022 and Tesla is not yet producing them in large volumes. In March, Musk announced that Tesla plans to build a new plant near Monterrey, Mexico. Then, after a meeting with Indian Prime Minister Narendra Modi in June, he announced that he wanted to invest in India as well.
The price cuts had an impact on earnings in the first quarter. Sales increased by almost a quarter in the January-February period thanks to higher car sales. However, profit fell 24 per cent due to lower prices and rising raw material costs. The company will report its second-quarter results on July 19.
Source: ČTK
