You can totally crush competitors by lowering prices. All fake numbers but let's say the Mach-E costs Ford $55K and they sell it for $60K to make a $5K profit. Tesla on the other hand makes the Y for $40K and sells it for $60K to make a $20K profit. Tesla could cut prices of the Y to $54K and still make a profit. The challenge to Ford is then to either match the price cut and take a loss of $1K per vehicle or lose a ton of sales.

Tesla cut prices to make sure their most popular vehicles qualify for the EV credits in the US, not out of the goodness of their hearts or because demand was weakening

 

I don't agree with ^^^. Higher borrowing costs and increased competition for electric cars is the reason. 2022, Tesla missed their sales targets. If robust for an any product is so strong... no company would discount a product, they would introduce a cheaper product or the same product with less equipment. Tesla's discount is no different than a rebate from any other manufacturer.

Today, Tesla cut their prices in China by 50%. never a good thing if there is strong demand.

 

Source for the 50% cut?

They didn't choose an arbitrary number for the price cut, they cut it so the Y would get the EV credit after several years of increasing the price post original EV credit

 

My bad, I was incorrect.. It was an analysis of Tesla price cuts. https://www.livemint.com/news/world/...532231124.html



The credit would not matter if the demand was so high and the wait was so long. The alternative would be for Tesla to offer a lower cost model Y that qualifies for the credit, but they didn't. The cost of buying new car is increasing as the cost to borrow is increasing because of the interest rate hikes.

 

Tesla sells every car they make that alone invalidates any claim of no demand. 2022 sales "miss" was largely because of factory shutdowns due to the unknown virus of unknown origin.

 

Who said NO demand?

Now..with price cuts.

 

LoL straight quote from the Drinker himself! "That's all I have to say. Go away now...."

 

They still had a backlog before they cut prices to meet the credit. They have a bigger backlog now that they've cut prices and meet the credit. Once the Y was reclassified as an SUV they also raised prices another $1-2K. Cutting prices to their existing models forces the other brands to cut their prices as well and they don't have Tesla level margins to absorb that cost.

 

I just don’t see the viewpoint you have. High demand items are never discounted.

I just looked up Tesla Y here in Canada. March-April delivery. Prices were cut here.

below that is the US.

of course the cheapest long range models are a bit longer.









That is a fallacy. Tesla only has three high MSRP line of models. Toyota makes just as much if not more profit off their trucks and high priced SUVs. Toyota has smaller margin cars that all get lumped into the game. For example, RAM has $10,000 discounts off their RAM trucks, that doesn't mean their profits are lower or higher than Teslas.

 

Do you base 3 series demand on the M3?

 

it's one (big) factor of 3 - price, product, service.

not sure your point, but if toyota did that, sales would go up, and it would hurt honda, hyundai, kia, mazda, etc. but toyota can't afford to do that.

good point. they cut them when due to a ridiculous glitch in laws they didn't qualify, but then gov changed and they quality, so tesla then raised prices. good moves!

tesla is like mohammad ali, floats like a butterfly, stings like a bee
they can do any or all of those things.

traditional car makers generally do their once a year price and model changes and that rigid model is KILLING them.

plus tesla is so used to very strong demand, that even if they have a big backlog, if they get a whiff of slowing new orders, they'll do something to keep the party going. it's like apple bringing out new products every year when there's really nothing 'wrong' with the ones they already have. but when you're a leader you have to obsolete YOURSELF in one way or another.

actually in the past year, tesla cut prices 14% in china based on an article i found/read. that sounds more like it.

 

product excellence is still the #1 factor...by a long shot If demand is high, then price cuts do not happen.

There you go.

Actually, there is a A LOT wrong with Apple products.

 

Tesla did not cut prices 50% in China, read the articles more carefully. There was one specific trim level that was 50% cheaper vs. in the United States. Don't know if that is still the case.

Good news on the EV credit front the rules might be changing again and the RWD Model 3 will no longer qualify.

 

Some of my friends are pushing me to order the Model Y now as the tax credits may be gone soon, but than I have an extra car I have to pay full coverage on until it's lease ends (the Ioniq)

 

In theory any Tesla will battery cells made in the United States will continue to quality but don't bet on it. RWD Model 3 uses LFP cells made in China.