Tesla stock has risen slightly in pre-market trading following the release of data from China regarding its August sales. The EV giant only managed to eke out a modest gain in sales despite a series of price cuts in the world’s biggest car market.
The China Passenger Car Association has reported that Tesla’s August sales in the country only increased by 9.3% compared to the previous year, reaching 84,159 units. These numbers fell significantly short of June levels, even after the electric car manufacturer implemented two significant price cuts within three days. Tesla lowered its prices further the previous Friday and extended rebates to customers in the United States, China, and Europe via its “Refer and Earn” program.
Tesla’s July sales were affected by the yearly scheduled maintenance of its gigafactory in Shanghai.
Tesla’s CEO, Elon Musk, told investors in July that the company is willing to prioritize increasing vehicle production over profit margins, as he believed this strategy would lead to a significant increase in the company’s valuation soon. He emphasized that Tesla’s focus for the latter half of the year would remain on gaining market share rather than expanding profit margins.
In Q2 2023, Tesla, Inc. (NASDAQ: TSLA) earned 91 cents per share, a 20% increase from the previous year, while revenues surged by 47% to reach a record $24.5 billion.
Tesla reported adjusted automotive margins of 18.7%, a slight improvement from the first quarter’s 18.3% but notably lower than last year’s second-quarter figure of 22.4%, significantly due to price cuts in its major global markets. Wall Street forecasts ranged between 17.5% and 17.9%.
As of the latest update, Tesla stock is up 0.31% in pre-market trading, indicating an opening bell price of $245.76 per share.