The furious price war he unleashed for his electrics cars Elon Muskfounder of the automotive industry Teslaworries others Automotive industrylike french Renaultwho considers his own efforts electric drive and revenue recovery will be affected. Specifically, the tycoon said his campaign, which began in late 2022, is gaining momentum, adding that his priority now is to increase sales over profits when the economy is showing weakness. Meanwhile, it should be noted that, again, according to Elon Musk, during this year he will completely complete technologies autonomous driving. Since the beginning of 2023, under pressure from its Chinese rivals, Tesla has cut the prices of its models six times in the US and Chinese markets to stimulate demand and fend off growing competition.

As a result, the first quarter recorded the lowest gross profit margin in two years, different from market estimates. This led to a decrease in the share of Tesla in yesterday’s trading before the start of the session by more than 6% in the US and 7% in Germany, while the share of Renault also lost 7.9% under the influence of the fall.

“It’s better to move a large number of vehicles to a lower rate of return and reap the benefits of that in the future as we improve autonomy,” Musk told analysts on a mid-week conference call. He also clarified that while the economy is still creating uncertainty, orders received by Tesla have exceeded production. Elon Musk, who previously said he would like to hit sales of 2 million vehicles this year, declined to confirm on Wednesday but backed the company’s official goal of 1.8 million sales.

Elon Musk insists on a policy of stimulating sales, not profits.

“Worrying Tesla sales data in China shows that demand for its vehicles is declining more than expected as competition from local electric vehicle makers intensifies,” said Jesse Cohen, senior analyst at Investing.com. Tesla stressed that it still believes its operating profit margin will remain the highest among major automakers. However, the overall gross margin of 19.3% was below market expectations of 22.4%, according to 14 analysts polled by Refinitiv.

For its part, French automaker Renault has made it clear that it does not intend to drastically cut the prices of its electric vehicles, including the recently launched Megane E-Tech, and follow the example of US rival Tesla.

French company CEO Fabrice Campolive stressed a few days ago that he would review the prices of his cars around the world, but described Tesla’s decline as a warning and challenge for the entire industry.