Shares of the electric car company plummeted “Tesla” By more than 9 percent yesterday, Thursday, a day after the company announced a decrease in net income by more than 20 percent compared to the same quarter of last year, according to “CNBC“.
registered “Tesla” Clear Revenues $2.51 billion for the first quarter of 2023, down 24 percent from the previous year, and earnings per share of 73 cents, down 23 percent from the previous year.
“We’ve taken the view that pushing for higher volumes and a larger fleet is the right choice here, in return for lower volume and higher margin,” CEO Elon Musk said during the earnings announcement.This means that Tesla chooses to reduce the prices of its cars in order to increase its sales volume and market share, even if that means sacrificing its profit margin in the short term. In other words, Musk says that Tesla prioritizes growth over profitability at the present time, because it believes That this will bear fruit in the future, which raised the concerns of investors.
The company believes that by doing so, it can leverage to outpace its competitors and capture more lifetime value from its customers through the recurring revenue streams that come from software upgrades and autonomous driving subscriptions.
Tesla also believes that this strategy will help it achieve its long-term vision of transforming the automotive sector towards sustainable energy.
In this context, reduced “Tesla” Prices in the United States six times since January, and the most recent reduction was on Tuesday, when it reduced the price of the “Model 3” by 11 percent and the “Model Y“ by 20 percent.
