swajames

Only in the crazy world of Tesla are price cuts seen as a bad thing. This is all about volume. Tesla has big margins by industry standards and has more room than competitors to tweak pricing. Manufacturing simplifications will reduce cost and will soften the impact of these price reductions. Tesla wants to sell more Teslas, and this is how you do it.

It's also how Tesla has continually operated. Buy one today, and you run the risk that you could have paid more or less tomorrow.

lamar411

These huge price drops really screw up the lightly used vehicles for sale as well as owners who purchased in the last few months. My friend bought a fully loaded Model Y four or five months ago and I know they will be super pissed the price went down by such a large amount.

AMIRZA786

On top of that, Elon practically telegraphed this price cut last month:

https://www.teslarati.com/elon-musk-...-lower-prices/

RNM GS3

Companies don’t start cutting prices if demand is the same or better than previous. Its obvious that demand is softening for Teslas and most luxury goods as ppl are not as eager to spend given economic conditions.

AMIRZA786

Demand hasn't gone down, the numbers prove that. Look at any sales graph. It's called undercutting the competition because you're smarter than them, and have more margin to play with

JeffKeryk

Tesla is so busy producing cars and trying to get overdue vehicles released (Cybertruk, Roadster and ???) that they are resource constrained.
Lowering the prices of what they currently have at least buys them time for the Model 2. This is what margin strength allows for.

Not to mention strikes terror into the other car companies that lose money on their EV Business Unit. Maybe even predatory pricing?

LeX2K

JeffKeryk

Lower demand is one reason to cut prices.Tesla grew better than 40% in 2022 in a declining overall market. Tesla continues to ramp production. Does that sound like a demand problem to you?
Another reason is to squeeze the competition.

swajames

It should be fairly apparent by now that this isn't what drives Tesla. The demand problem Musk is solving is generating even more demand, not supporting weak demand. Musk sets sales goals, not revenue goals. Volume wins over margin for Tesla, and this is about driving more higher demand over the longer term. The other piece here is pushing more under the 55K threshold for tax credit purposes. We called that last week in the other thread.

AMIRZA786

There's really no other way to slice this bread...Tesla's has had nothing but straight up growth in the middle of a recession. 40 percent plus growth doesn't sound remotely like a demand problem. Tesla has orders to fill for at least the foreseeable future. What they are doing is undercutting their competition, putting intense pressure on car companies that are struggling to build and even make a profit on BEV (and even PHEV's). Car companies are in trouble

jwong77

I think part of the appeal of Tesla is that it is still somewhat aspirational brand, but discounting too much may reduce the aspirational part of it. Only time will tell.

swajames

You’re right - that’s a legitimate point. Something to watch as we look forward.

Bob04

Didn't someone here just pull the trigger on a Plaid because of the year end $7500 discount? Or was that another forum. Plaids just dropped $21K. Yikes.

Hameed

Yep
​​@ST430 just got a Plaid before yesterdays price drop

Bob04

And that $52900 base price on the model Y now qualifies it for the $7500 tax credit that the IRS tried to screw Tesla out of.