👉 Background: Tesla is one of the OG's in the electric vehicle market. Since it went public in 2010 at a value of $2.2 billion USD, it has gone from strength to strength. Tesla is now worth over $680 billion USD and has been worth even more in the past.

👉 What happened: But Tesla's earnings for the most recent quarter weren't so pretty. Tesla's operating profit margins dropped almost 10% compared to the same time last year. And, this is largely due to the fact that Tesla has dropped the price of its cars 6 times already this year.

👉 What else: Then Musk delivered the final blow: the waiting time for Tesla's Cybertruck has stretched out to more than four years. Ouchhh.

What's the key learning?

💡In the business world, every company's goal is to grow in size and maximise profits; however, accomplishing both at the same time can be like walking a tightrope.

💡On one hand, you want to grow your sales volume as fast as possible, which may mean dropping prices. But on the other hand, you need to maintain a healthy profit margin to ensure that profitability is sustainable.

💡Just last year, Tesla was praised for having some of the highest operating margins in the car industry next to the likes of Ferrari and BMW. But, with Tesla's multiple price drops, its profit margin puts it in the middle of the road of the car industry.

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