- By Annabelle Liang
- business reporter
2 hours ago
Image source: Getty Images
Electric car maker Tesla said it delivered a record number of vehicles in the three months to the end of June after cutting prices to boost sales.
It has lowered prices in markets like the US, UK and China to compete with rival manufacturers.
This weekend, major Chinese automakers also reported an increase in sales in June.
Earlier this year, Tesla CEO Elon Musk said he believes striving for higher sales while lowering profits is the “right choice” for the company.
On Sunday, Tesla said it delivered 466,140 vehicles in the second quarter, up more than 80% year over year.
Meanwhile, the company said it increased vehicle production to nearly 480,000 over the same period.
“Tesla has made a strategic decision to become a volume manufacturer,” Bill Russo, founder and chief executive officer of consultancy Automobility, told the BBC.
“This was the main reason for the increase in sales, as the higher-volume Model 3 and Model Y benefited most from the price war,” he added.
Dan Ives of investment firm Wedbush Securities told the BBC that “the price cuts in China were a smart move that was hugely successful for Tesla.”
China is Tesla’s second largest market after North America.
The company slashed prices in the world’s second-largest economy, where it faces competition from local electric car makers.
Over the weekend, Beijing-based Li-Auto announced that its June deliveries hit an all-time high of 32,575, marking the third straight monthly sales record.
Meanwhile, shipments of Shanghai’s Nio and Guangzhou’s Xpeng for the month rose to 10,707 and 8,620, respectively.
Tesla is also struggling with increasing competition in other parts of the world and the impact of higher borrowing costs for customers.
The company responded with price cuts this year.
“We’re not starting a price war, we’re just lowering prices to allow for affordability at scale,” Musk wrote on his social media platform Twitter.
At the time, Tesla said its total first-quarter sales were up nearly a quarter year over year as auto sales picked up.
However, due to price cuts and higher costs of raw materials and other commodities, profit fell by 24% over the same period.
The company will release its second quarter financial results on July 19.