Musk eyes more price cuts in 'turbulent times'

Tesla chief executive Elon Musk says he might cut prices of electric vehicles again in turbulent times, even though its second-quarter gross profit margin was squeezed to a three-year low.

The company has slashed prices several times in the United States, China and other markets since late last year, and increased discounts and other incentives to reduce inventory, as it tries to shield against competition and economic uncertainty.

"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."

Tesla's quarterly automotive gross margin, excluding regulatory credits, fell from 19.3 percent in the first quarter to 18.2 percent in the second quarter, the lowest in 16 quarters. That was in line with Wall Street estimates, but a far cry from the 26 percent it reported a year earlier.

Nonetheless, the EV giant reported US$24.9 billion (HK$194.22 billion) in revenue in the April-June period, an historic high.

Earlier, Tesla said in a statement it was focusing on reducing costs and on new product development, and that the "challenges of these uncertain times are not over."

Shares of Tesla fell 5 percent when the US market opened.

Meanwhile, China's Farizon, a maker of electric and hybrid trucks which is owned by automaker Geely (0175), has raised US$600 million in a Series-A funding round.

The Hangzhou-based company said it plans to use the funds for further technology and product development, as well as expansion outside China.