Tesla (TSLA) -) shares moved higher Tuesday after data from China indicated only a modest gain in August sales despite a series of price cuts in the world's biggest car market.
The China Passenger Car Association said August sales from the Austin electric-vehicle producer rose 9.3% from a year earlier to 84,159 units, a tally that came in firmly below June levels even as the carmaker unveiled two major price cuts in the span of three days.
Tesla also followed those cuts with another set of reductions last Friday, on top of rebates for buyers in the U.S., China and Europe as part of its "Refer and Earn" program.
The July tally at Tesla was affected by the yearly scheduled maintenance of its critical Gigafactory in Shanghai.
Tesla Chief Executive Elon Musk told investors in July that "it does make sense to sacrifice margins in favor of making more vehicles because we think, in the not too distant future, they will have a dramatic valuation increase."
He said Tesla would continue to focus on winning market share, as opposed to widening profit margins, over the back half of the year
Tesla earned 91 cents per share over the three months ended in June, up 20% from a year earlier, even as revenue surged 47% to a record $24.5 billion.
Adjusted automotive margins were 18.7%, Tesla said, up from the 18.3% figure recorded over the first quarter but down from the year-earlier second-quarter tally of 22.4% following a series of price cuts in its biggest global markets. Wall Street forecasts hovered between 17.5% and 17.9%.
Tesla shares were marked 3.25% higher in early Tuesday trading to change hands at $252.97 each. The stock is down around 0.1% over the past month but had still gained an impressive 132% for the year.
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