Despite price cuts, Tesla's quarterly earnings declines by more than 40%.

In an effort to increase demand, the American manufacturer of electric vehicles Tesla dropped prices in a number of locations, including its home market and China, resulting in a more than 40% decrease in profit, which was worse than expected.

Tesla's net income for the three months that ended on September 30 was $1.9 billion, a 44% decrease. Revenue of $23.4 billion, up 9% year over year, fell short of Wall Street analysts' projections.

Due to several price cuts in China, the U.S., Japan, and other regions, as well as rising spending on the development of the Cybertruck, artificial intelligence, and factory renovations, its operating margin dramatically decreased to 7.6% from 17.2% during the same period previous year.

During Wednesday's elongated trade, Tesla shares decreased by close to 5%.

Elon Musk, the CEO, stated on an earnings call that Tesla's costs must be reduced in light of the pressure that high borrowing rates are putting on consumers.

"I just can't emphasize how important cost is," Musk stated. For the majority of individuals, having a car is a need rather than an option. To encourage sales, we must lower the price of our goods.