According to CEO Elon Musk, the decision to decrease prices and the resultant lower short-term profitability were necessary, as CNN reported.

Although we significantly cut pricing in the first quarter, it's important to note that we still have one of the strongest operating margins in the sector.


said Musk. "We believe that pursuing bigger volumes is a mistake.

thus in this case, a larger fleet is preferable to a lower volume and higher profits.

Unfortunately, the price reductions won't help current or upcoming Model 3 owners.

which were released ahead of the company's April 19 first-quarter results announcement

correspond with the U.S.'s cutbacks in EV credits.

Treasury, which became active on April 18. The Model 3's credit has been reduced to $3,750.