Tesla Inc. shares slid the most in more than three months after Elon Musk indicated his company will keep cutting prices to stoke demand even after markdowns early this year took a significant toll on profitability.
Tesla’s operating margin shrank to 11.4% in the first quarter, a roughly two-year low, after the company marked down its electric vehicles in January and March. Musk has done several more rounds of price cuts already this month and said he’s comfortable making less money on each car sold.
“We’ve taken a view that pushing for higher volumes and a larger fleet is the right choice here versus a lower volume and higher margin,” the chief executive officer told analysts late Wednesday. He and Chief Financial Officer Zachary Kirkhorn walked back an automotive margin forecast for the year and cautioned repeatedly that economic conditions are uncertain.
