Musk additionally mentioned through the earnings name that Tesla stays prepared to sacrifice income for quantity development. Future Full Self-Driving software program gross sales to Tesla homeowners will ultimately make the corporate way more worthwhile than it’s in the present day, he added.
Tesla lower car costs earlier this yr. As a consequence, the corporate’s gross margin within the second quarter fell to 18.2 % from 25 % in the identical quarter final yr.
Tesla CFO Zachary Kirkhorn mentioned on the Wednesday earnings name that gross margin “remained healthy” after a modest lower from the primary quarter’s 19.3 %. Tesla’s greatest value cuts have been in January.
Tesla’s industry-leading margins have allowed it to slash costs and improve gross sales incentives whereas nonetheless remaining extremely worthwhile. That has put stress on automakers akin to Ford and GM as they put together for the EV transition. Both automakers are shedding cash on their EVs and are anticipated to take action for years.
Ford lower the value of its Mustang Mach-E crossover, which competes with Tesla’s Model Y, following the Tesla value cuts earlier this yr. And on Monday Ford introduced a Ford F-150 Lightning pickup value discount. Ford had raised costs on the pickup, most just lately in March.
Ford’s Lightning pricing announcement got here simply days after Tesla introduced the beginning of manufacturing on its Cybertruck pickup after first displaying the car publicly in 2019. Chevrolet additionally just lately began restricted manufacturing of its Silverado EV.
Tyson Jominy, vice chairman of information and analytics at J.D. Power, mentioned Ford’s value motion on the Lightning is probably going unrelated to the Cybertruck announcement.
But Ford, like Tesla, has been prepared to regulate EV costs to spur demand.
“The timing of the Lightning price cut announcement seems auspicious on the surface, but it was likely only coincidental that Cybertruck started production over the weekend,” Jominy mentioned in an e-mail to Automotive News. “An action of that magnitude cannot be decided and implemented in a weekend.”
In reality, the Lightning’s greatest competitor comes from one other EV maker — Rivian, with its R1T pickup. Sales numbers for the primary half of the yr present Rivian making some progress towards the Lightning, which stays the EV pickup chief.
“Rivian has been ramping up production and was directly in Lightning’s rearview mirrors,” Jominy mentioned. “Slow production of F-150 Lightning meant R1T was challenging Lightning for segment sales leadership. This action will likely put that challenge to bed.”