Elon Musk’s company sells more than ever, but the price cut is leading to a significant reduction in profits, something that has not gone down very well in the markets. Tesla has accustomed customers and investors to success in a streak of profits and records that the industry has not seen in a long time. However, earlier this year, Elon Musk made a decision that may be having negative effects. In the third quarter of the year, Tesla has not delivered on its promises. Its profits have fallen precipitously, although, for the moment, there is nothing to fear. It is in the company’s plans.
If we look back, in January of this same year, the world witnessed the beginning of a trade war in the electric car segment. Tesla, the absolute leader throughout the world, cut rates overnight to distance itself from a competition unable to keep up. The discount chain was highlighted in all markets, mainly in China. The reduction in rates has been such that, right now, if the decision is solely economic, it makes no sense to buy an electric vehicle that is not a Tesla.
Elon Musk leaves more than 24 billion dollars in a single day
Musk launched an order to the industry to change the mentality and accelerate a change that is being delayed. The massive arrival of electric cars is not meeting estimates. Sales are still slow and the CEO of Tesla wants to step on the accelerator at the expense of stopping so much money coming in. Tesla continues to earn a lot, but the American tycoon believes that he is in a privileged position. He believes that his situation allows him to sell his cars with little or no profit and still make money. He does it with other parallel businesses such as recharging, the sale of emissions, or the sale of data, the last major objective.
Although yes, it is in a position to do so, we must not forget that Tesla is listed on the stock market. Its securities are among the most precious because throughout these years they have been a guarantee of increases and profitability, but investors have not responded very well to the financial results of the third quarter. The operating profit margin has fallen to 7.6%, almost 10 points less than a year ago at this same time (17.2%). Gross operating profit has also been cut by a quarter to 3,580 million euros. For this reason, Tesla shares have fallen more than 9% in just one day.
This fall has meant that in a single day, Elon Musk has seen his assets reduced by $24 billion. However, not all figures are bad or pessimistic. Sales continue to grow, although not as fast as in the past. BYD could overtake Tesla as the largest electric car manufacturer by the end of this year. In the third quarter, Tesla’s sales volume reached the astronomical figure of 22,240 million euros, 9% more than in the same period of the previous year. Global sales have allowed the company to deliver 435,059 units.