Elon Musk Says Tesla May Continue Cutting Prices amid “Turbulent Times”

After cutting prices several times in the U.S., China, and other markets since late last year, Tesla CEO Elon Musk said on Wednesday that his company would lower prices again in “turbulent times” even though his price war on automakers squeezes the company’s margins.

In an effort to fend off competition and economic volatility, the top manufacturer of electric vehicles (EVs) has reduced prices multiple times and increased discounts and other incentives to reduce inventory.

“One day it seems like the world economy is falling apart, the next day it’s fine. I don’t know what the hell is going on,” Musk told analysts on a conference call. “We’re in, I would call it, turbulent times.”

Musk has stated that Tesla will sacrifice profit in order to accelerate volume growth, despite the price reduction has put pressure on Tesla’s gross margin.

“I think it does make sense to sacrifice margins in favor of making more vehicles,” said Musk, adding that if macroeconomic conditions were not stable, Tesla would have to lower prices.

The April-June period gross margin for Tesla was 18.2%, the lowest in 16 quarters.

The top EV manufacturer reaffirmed its target of delivering about 1.8 million vehicles this year but warned that output will dip somewhat in the third quarter owing to scheduled maintenance and upgrades.