In an effort to stimulate purchases and keep demand afloat amid rising interest rates, Tesla (NASDAQ: TSLA) has implemented a series of price cuts across some of its most popular vehicles. Ranging from 15% to 18%, these lowered prices now appear on Tesla's bottom line as margins narrow.

As evidenced in the automaker's most recent Q2 earnings report, gross profit margins are down from their peak in Q1 2022 and currently hover around 18%. The shrinking margins have been a serious cause for concern among investors, yet this worry is likely misconstrued. Tesla's decision to cut prices is part of its grander vision for the future and makes it a valuable long-term option for investors.  

In 2017, electric vehicles (EVs) made up just 1% of new car sales. By 2022, this number grew to 13%.

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Source Fool.com