Elon Musk, CEO of Tesla, announced that the electric car maker can continue to reduce prices, because the global economy is going through “difficult times.”
The billionaire’s comments came after the company reported that its profit margin had shrunk, after facing stiff competition.
In recent months, Tesla has reduced the prices of its cars several times in major markets, including the United States and China.
The company said that its gross profit margin fell to 18.2 percent for the three months to the end of June, compared to 26.2 percent for the same period last year.
He added: “This looks like a price war, with no long-term strategy to increase profit margin if Tesla wins the war.”
Earlier this year, Musk said he believed pursuing higher sales, at lower profits, was the “right choice” for Tesla.
The company reduced prices in markets, including the United States, Britain and China, to compete with other manufacturers.
Earlier this month, the company said it had delivered a record number of vehicles in the three months to the end of June.
This comes at a time when more automakers have agreed to adopt Tesla’s charging technology for fully electric vehicles – which do not have a gasoline engine – (EVs).
Japanese auto giant Nissan said on Wednesday that its electric cars in the United States and Canada will be equipped with charging ports developed by Tesla, starting in 2025.
Jeremy Babin, Nissan’s president of the Americas, said the company is committed to “making electric mobility more accessible.”
This announcement comes in the wake of similar moves by American car manufacturers Ford and General Motors.