Tesla shares sink as Musk signals more price cuts ahead

Tesla Inc's shares sank 8 per cent on Thursday and dragged down other automakers after Chief Executive Elon Musk signaled the electric-vehicle maker will keep cutting prices to drum up demand even after taking a big hit to profitability.

"Facing a volatile macroeconomic backdrop and weakening demand, Tesla continues to prioritize units over near-term profits," said analysts at Canaccord Genuity. Musk suggested more cuts ahead, saying the company that has cut slashed prices six times so far this year will put sales growth ahead of profit in a weak economy.

"Long-term we believe this is the right strategy and leverages their cost leadership position. However, this does not come without pain as we now believe margins will get worse before they get better," RBC analyst Tom Narayan said.

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