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Tesla’s price war is putting pressure on suppliers

Credit: Tesla/Twitter

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Tesla started a price war last month, and as the company works to keep its costs as optimized as possible, some of its suppliers are preparing to experience some pressure. The concerns were related by industry officials who work with Tesla and its suppliers. 

Comments from executives during the fourth quarter and full-year 2022 earnings call suggest that Tesla is currently focused on its costs. Tesla Chief Financial Officer Zach Kirkhorn, for one, noted that the company was “attacking every area of cost,” and CEO Elon Musk noted that a recession, if one does happen, could lead to “meaningful decreases in almost all of our input costs.” 

Dan Sharkey, a co-founder of Brooks Wilkins Sharkey & Turco and a lawyer who represents automotive suppliers, noted that aggressive price cuts are never really good news for suppliers. “It is never good for suppliers when (automakers) cut vehicle prices because that pressure rolls downhill. I never like it, because I know eventually they’re going to try to get it out of one of us,” Sharkey said. 

“My message is, there’s not going to be any room there. Many suppliers are financially struggling,” he added.

While major Tesla suppliers such as Panasonic, LG Energy Solution, CATL, and IDRA, are typically cautious about statements concerning their relationship with the electric vehicle maker, a Tesla supplier who opted to remain anonymous informed the publication that the company focused more on delivery over pricing during the pandemic. 

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This meant that Tesla was willing to pay a premium to acquire parts at a faster pace. Following the Q4 and FY 2022 earnings call, the Tesla supplier is reportedly worried that this trend will change. Tesla, for its part, has not issued a statement about the matter as of writing. 

Carmakers such as Tesla saw notable margins during the pandemic. But while this was the case, some suppliers reportedly were not able to fully pass along their higher costs, resulting in lower margins. Bain, a consultancy firm, estimated that in Q3 2022, the profit margins of automakers were almost 3% higher than suppliers. With this in mind, suppliers would likely experience even more pressure as carmakers like Tesla lower their prices. 

Some Tesla suppliers are already experiencing a lot of headwinds. Gissing North America, a Michigan-based company that produces acoustic systems and headliners for car ceilings, counted Tesla as its largest customer. Yet last year, the company filed for bankruptcy due to high commodity prices and labor costs. Steven Wybo, chief restructuring officer, noted that he does not really see things getting easier anytime soon. 

“There’s certain things that I think will ease, but there’s this labor component that’s built in to the price of everything, and I don’t see that easing any time soon and potentially never,” Wybo said. 

Industry officials, for their part, have noted that Tesla might aim to reassure its suppliers by highlighting that the potential losses from lower prices will be more than made up for in higher volumes of orders. This would definitely be beneficial for Tesla and its suppliers, especially considering the electric vehicle maker’s efforts to ramp to 20 million vehicles per year by the end of the decade. 

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Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Tesla UK sales see 14% year-over-year rebound in June: SMMT data

The SMMT stated that Tesla sales grew 14% year-over-year to 7,719 units in June 2025.

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Credit: Tesla

Tesla’s sales in the United Kingdom rose in June, climbing 14% year-over-year to 7,719 units, as per data from the Society of Motor Manufacturers and Traders (SMMT). The spike in the company’s sales coincided with the first deliveries of the updated Model Y last month.

Model Y deliveries support Tesla’s UK recovery

Tesla’s June performance marked one of its strongest months in the UK so far this year, with new Model Y deliveries contributing significantly to the company’s momentum. 

While the SMMT listed Tesla with 7,719 deliveries in June, independent data from New AutoMotive suggested that the electric vehicle maker registered 7,891 units during the month instead. However, year-to-date figures for Tesla remain 2% down compared to 2024, as per a report from Reuters.

While Tesla made a strong showing in June, rivals are also growing. Chinese automaker BYD saw UK sales rise nearly fourfold to 2,498 units, while Ford posted the highest EV growth among major automakers, with a more than fourfold increase in the first half of 2025.

Overall, the UK’s battery electric vehicle (BEV) demand surged 39% to to 47,354 units last month, helping push total new car sales in the UK to 191,316 units, up 6.7% from the same period in 2024.

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EV adoption accelerates, but concerns linger

June marked the best month for UK car sales since 2019, though the SMMT cautioned that growth in the electric vehicle sector remains heavily dependent on discounting and support programs. Still, one in four new vehicle buyers in June chose a battery electric vehicle.

SMMT Chief Executive Mike Hawes noted that despite strong BEV demand, sales levels are still below regulatory targets. “Further growth in sales, and the sector will rely on increased and improved charging facilities to boost mainstream electric vehicle adoption,” Hawes stated.

Also taking effect this week was a new US-UK trade deal, which lowers tariffs on UK car exports to the United States from 27.5% to 10%. The agreement could benefit UK-based EV producers aiming to expand across the country.

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Tesla Model 3 ranks as the safest new car in Europe for 2025, per Euro NCAP tests

Despite being on the market longer than many of its rivals, the Tesla Model 3 continues to set the bar for vehicle safety.

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Credit: Tesla Asia/X

The Tesla Model 3 has been named the safest new car on sale in 2025, according to the latest results from the Euro NCAP. Among 20 newly tested vehicles, the Model 3 emerged at the top of the list, scoring an impressive 359 out of 400 possible points across all major safety categories.

Tesla Model 3’s safety systems

Despite being on the market longer than many of its rivals, the Tesla Model 3 continues to set the bar for vehicle safety. Under Euro NCAP’s stricter 2025 testing protocols, the electric sedan earned 90% for adult occupant protection, 93% for child occupant protection, 89% for pedestrian protection, and 87% for its Safety Assist systems.

The updated Model 3 received particular praise for its advanced driver assistance features, including Tesla’s autonomous emergency braking (AEB) system, which performed well across various test scenarios. Its Intelligent Speed Assistance and child presence detection system were cited as noteworthy features as well, as per a WhatCar report.

Other notable safety features include the Model 3’s pedestrian-friendly pop-up hood and robust crash protection for both front and side collisions. Euro NCAP also highlighted the Model 3’s ability to detect vulnerable road users during complex maneuvers, such as turning across oncoming traffic.

Euro NCAP’s Autopilot caution

While the Model 3’s safety scores were impressive across the board, Euro NCAP did raise concerns about driver expectations of Tesla’s Autopilot system. The organization warned that some owners may overestimate the system’s capabilities, potentially leading to misuse or inattention behind the wheel. Even so, the Model 3 remained the highest-scoring vehicle tested under Euro NCAP’s updated criteria this year.

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The Euro NCAP’s concerns are also quite interesting because Tesla’s Full Self-Driving (FSD) Supervised, which is arguably the company’s most robust safety suite, is not allowed for public rollout in Europe yet. FSD Supervised would allow the Model 3 to navigate inner city streets with only minimal human supervision.

Other top scorers included the Volkswagen ID.7, Polestar 3, and Geely EX5, but none matched the Model 3’s total score or consistency across categories. A total of 14 out of 20 newly tested cars earned five stars, while several models, including the Kia EV3, MG ZS, and Renault 5, fell short of the top rating.

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Why Tesla’s Q3 could be one of its biggest quarters in history

Tesla could stand to benefit from the removal of the $7,500 EV tax credit at the end of Q3.

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(Credit: Tesla)

Tesla has gotten off to a slow start in 2025, as the first half of the year has not been one to remember from a delivery perspective.

However, Q3 could end up being one of the best the company has had in history, with the United States potentially being a major contributor to what might reverse a slow start to the year.

Earlier today, the United States’ House of Representatives officially passed President Trump’s “Big Beautiful Bill,” after it made its way through the Senate earlier this week. The bill will head to President Trump, as he looks to sign it before his July 4 deadline.

The Bill will effectively bring closure to the $7,500 EV tax credit, which will end on September 30, 2025. This means, over the next three months in the United States, those who are looking to buy an EV will have their last chance to take advantage of the credit. EVs will then be, for most people, $7,500 more expensive, in essence.

The tax credit is available to any single filer who makes under $150,000 per year, $225,000 a year to a head of household, and $300,000 to couples filing jointly.

Ending the tax credit was expected with the Trump administration, as his policies have leaned significantly toward reliance on fossil fuels, ending what he calls an “EV mandate.” He has used this phrase several times in disagreements with Tesla CEO Elon Musk.

Nevertheless, those who have been on the fence about buying a Tesla, or any EV, for that matter, will have some decisions to make in the next three months. While all companies will stand to benefit from this time crunch, Tesla could be the true winner because of its sheer volume.

If things are done correctly, meaning if Tesla can also offer incentives like 0% APR, special pricing on leasing or financing, or other advantages (like free Red, White, and Blue for a short period of time in celebration of Independence Day), it could see some real volume in sales this quarter.

Tesla is just a shade under 721,000 deliveries for the year, so it’s on pace for roughly 1.4 million for 2025. This would be a decrease from the 1.8 million cars it delivered in each of the last two years. Traditionally, the second half of the year has produced Tesla’s strongest quarters. Its top three quarters in terms of deliveries are Q4 2024 with 495,570 vehicles, Q4 2023 with 484,507 vehicles, and Q3 2024 with 462,890 vehicles.

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