Tesla Has Just Become Another Car Company As Prices In The US For Their Cars Are Slashed

Tesla for years has tried to position itself as not like every other car company out there. But that’s clearly changing as news has come out that prices for many of their cars have been slashed:

This follows similar price cuts in China. The question is why are they doing this? I think the answer has many aspects to it:

  • Inventory: Tesla is likely sitting on a lot of inventory. They didn’t ship as many cars in 2022 as they had hoped. Thus they need to get rid of those cars. And fast.
  • A Slowing Economy: People are less likely to splash out the cash to by a big ticket item when the economy is slowing. Thus Tesla needs to give people an incentive to buy now rather than wait and see if the economy improves. Especially since this pricing change makes some of their cars eligible for tax credits which might make someone spring for a Tesla.
  • Elon Musk: The behaviour of Elon Musk has to be a factor here as there were stories of people cancelling their orders of Tesla vehicles because of the stuff he’s said and done over the last few months. That has to have cost Tesla a number of sales.
  • Competition: Tesla is no longer the only game in town when it comes to EV’s. GM, Audi, VW, Hyundai, Kia to name a few companies are all in this game. Which means that EV shoppers have options and Tesla won’t come out on top by default.

In short, Tesla has just become a car company who has to cut prices and offer incentives to get people to buy. And that’s a habit that’s hard to kick if you’re a car company because consumers just get used to incentives on new cars. Which is why I don’t know if they can get past this. I’m personally thinking that Tesla is in deep trouble here, and these price cuts are just the tip of the iceberg as they really don’t have a whole lot of cards that they can play here. But as always, I am free to be proven wrong.

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