Tesla (TSLA) -) shares moved lower in early Friday trading after the carmaker unveiled the biggest re-vamp to its signature Model 3 sedan in six years while introducing another round of price cuts in key markets around the world.
Tesla will introduce the new Model 3 first to markets in China and Europe, including a longer driving range of 606 kilometers, upgraded sound system and a rear seat display screen, with a base price that is between 10% and 12% higher than existing models.
The move marks the first time Tesla chose China over the U.S. to reveal a new model, and made no mention as to when it will introduce the new Model 3 to its home market.
Tesla also slashed prices on its Model S and Model X units by between 14% and 21%, including in U.S. markets, while also lowering the price of its full self-driving package -- a key plank in CEO Elon Musk's profit drive -- by around $3,000.
Musk, in fact, told investors last month that he group is in early stage talks to license its full-self driving technology to a major automotive rival.
The FSD licensing plans provided the key surprise to an otherwise tepid second quarter earnings discussion, which was mostly focused on Tesla's efforts to defend profit margins amid an expected slowdown in September quarter production, an uncertain macro environment and ongoing EV price cuts.
Tesla earned 91 cents per share over the three months ending in June, up 20% from last year, even as revenues surged 47% to a record $24.5 billion.
Adjusted automotive margins were 18.7%, Tesla said, up from the 18.3% figure recorded over the first quarter but down from last year's second quarter tally of 22.4% following a series of price cuts in its biggest global markets. Wall Street forecasts hovered between 17.5% and 17.9%.
"We are focusing on cost reduction, new product development that will enable future growth, investments in R&D, better vehicle financing options, continuous product improvement and generation of free cash flow," Tesla said. "The challenges of these uncertain times are not over, but we believe we have the right ingredients for the long-term success of the business through a variety of high potential project."
Tesla shares were marked 3.6% lower in early Friday trading to change hands at $248.64 each.
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