But these cuts have eaten into Tesla's profit margins. In Wednesday's earnings report, the company disclosed that its profit had plunged 24% year-on-year to just over $2.5 billion.
"The extent of margin declines was below what I was expecting and what the market was expecting too," he told Insider."That's why we saw the stock sell-off, it was a reaction to that."In Wednesday's earnings call, Musk told investors that the company will put sales growth ahead of profit in a weak economy.
Musk's willingness to pursue a strategy that is hitting profits suggests he might be eyeing a market occupied by legacy automakers. Ford was one of the only traditional automakers to respond to Tesla's cuts in January,While price competition isn't uncommon in the auto industry, car companies might struggle to match the size of Tesla's cuts without hurting their own profit margins.
Musk and other executives said Tesla would bring in innovative manufacturing techniques and use smaller factories in a presentation on March 1.
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