Tesla has recently reduced its prices, in some cases dramatically. There are two interpretations of this. The price reductions could be an indication of the pressure Tesla is under to act in the midst of increasing competition. But it could also be seen as a sign of Tesla's strength, because the company is putting pressure on competition.
Perhaps there is a piece of truth in both explanations. There is no doubt that Tesla can afford to start a price war more than many competitors, given its above-average profit margins compared to the rest of the industry. But the price reductions have left their mark very quickly.
Tesla's profit margin dropped significantly in the recent quarter. In addition, resale prices are being depressed, which certainly does not give a good feeling to those Tesla customers who still paid the higher prices.
CEO Elon Musk accepts this. He is determined to further reduce prices, even if this is at the expense of margins. Record profits, as Tesla reported until recently, may no longer be expected for the time being.