Tesla has posted its lowest profit in two years as the world’s biggest electric car maker feels the impact of a price war in China and the US.
The company, led by Elon Musk, said sales rose by 9pc in the three months to October after it sold more vehicles than in the same period last year.
However, profits fell by 44pc to $1.9bn (£1.6bn). The company’s operating margins – a measure of profitability – shrunk from 9.6pc three months ago to 7.6pc.
Tesla has embarked on a string of price cuts this year in an attempt to sustain demand amid growing competition. It has also been hit by higher electricity prices in some countries that has hit demand for electric vehicles.
The company said on Wednesday night it was cutting internal costs, meaning it is able to produce cars more cheaply.
It said: “We continue to believe that an industry leader needs to be a cost leader.”
The company added that the profit drop was partly due to a big increase in expenses as it invests in areas such as artificial intelligence systems used to power its self-driving car technology.
Tesla had already revealed that sales of its cars were slowing down. Earlier this month it posted quarterly figures showing that deliveries had fallen from the second quarter of the year.
BYD, China’s biggest electric car manufacturer, came close to surpassing Tesla’s sales and is expected to by the end of the year.
On Tuesday, the company cut the price of its Model 3 car in the UK, making the new entry level version of the vehicle £3,000 cheaper.
It has also aggressively cut prices in the US and China, its key markets.
Tesla has faced questions about Mr Musk’s priorities after the billionaire bought Twitter last year and funded a new artificial intelligence company, x.ai.
The company is gearing up to start sales of its Cybertruck pickup, which has been delayed. Mr Musk has also said he wants to release a cheaper, $25,000 vehicle as well as a fully autonomous “robotaxi”.
