Tesla’s Q3 Profit Falls 37% After Price Cuts
Tesla Inc. reported a significant decline in profitability for the third quarter of 2023, with profits dropping 37% compared to the same period last year. The company attributed this decline to its decision to cut car prices in an effort to increase sales volume. Despite selling more vehicles, the lower prices resulted in reduced revenue per unit, impacting overall profitability.
The company’s sales were also bolstered by a federal tax credit for electric vehicles, which expired in September. This incentive encouraged many buyers to purchase Tesla vehicles before the credit was no longer available. However, the lower prices may have contributed to the drop in profit margins. Tesla’s strategy of prioritizing volume over price has raised questions about its long-term financial sustainability.