Tesla’s profit slumped in the third quarter after the carmaker cut prices to maintain its dominance of the market for electric vehicles.
The company reported a net profit of $1.9 billion from July through September. That compared with $2.7 billion in the second quarter and $3.3 billion a year earlier.
The company has slashed prices by around 25 percent in the United States during the last year, putting the priority on sales rather than profit. The least expensive version of Tesla’s best selling car, the Model Y sport utility vehicle, now starts at $44,000 before government incentives, or roughly as much as the comparable Toyota RAV4 Prime plug-in hybrid, which has an electric motor and a gasoline engine.
Despite the cuts, Tesla’s share of the electric vehicle market in the United States slumped to 50 percent in the third quarter from 60 percent in the first quarter, according to Kelley Blue Book. BMW, Mercedes, Hyundai, General Motors and other automakers have been introducing new electric vehicles at a rapid clip, eroding Tesla’s dominance.
The decline in profit was not a surprise after Tesla said earlier this month that sales fell in the third quarter because of temporary factory shutdowns to retool assembly lines at factories in Austin, Texas, and Shanghai.
Investors are hoping that the Cybertruck pickup, which Tesla’s chief executive, Elon Musk, has promised to begin selling by the end of the year, will revive sales. Tesla could also benefit if the United Automobile Workers strike against Ford Motor, G.M. and Stellantis drags on. Tesla workers do not belong to a union.