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+--- Thread: Elon Musk started a price war that Tesla can't win (/showthread.php?tid=282080)
Elon Musk started a price war that Tesla can't win - Speedy - 11-12-2023
https://www.businessinsider.com/elon-musk-tesla-price-cuts-electric-cars-losing-business-strategy-2023-11
Elon Musk has started an electric-vehicle price war that Tesla can't finish.
Under increasing pressure from new competition, Tesla spent the past year slashing the average price of its models by roughly 25%. The Model 3 fell from $48,000 to $44,380. The luxury Model S, meanwhile, plunged from a high of $130,000 to $96,380. The cars, as they say, have been priced to move.
It's an unusual business strategy, to put it mildly. "I can't think of another point in the history of automotive when a brand that wasn't going out of business cut prices 20% a year," Mark Schirmer, the director of communications at the research firm Cox Automotive, told me. Tesla is hoping that lower prices will drive up sales and slow the advance of the company's rivals — maybe even scare some of them out of the market altogether.
But that's not what's happening. Lower prices are not translating into higher sales. The number of cars Tesla delivered to customers in the third quarter actually declined. Revenue is dropping, and the company's once fat profit margins are getting squeezed — down to 17.9% in the third quarter, compared with 25.1% a year ago. Competitors aren't being driven out of business, either. Once totally dominant in the EV space, Tesla's share of the US market has fallen from 62% at the beginning of the year to only 50% today.
Re: Elon Musk started a price war that Tesla can't win - Carnos Jax - 11-12-2023
businessinsider wrote:
Under increasing pressure from new competition, Tesla spent the past year slashing the average price of its models….
This is not true, Tesla effectively has no competition. They’ve not been cutting prices in response to other EV manufacturers. Rather they erroneously believe that EV prices are too high. I say erroneously, because as the article notes, these price cuts are not translating to increased sales. And to clarify, sales are increasing to be sure, but just not as fast as Tesla is increasing production.
The primary problem is Tesla (and the rest of the EV industry) not advertising. There’s too much FUD and ignorance out there on everything like range to cost, and so consumers who could most benefit from EVs are not buying. Musk is too butt hurt from the way the media has treated Tesla in the past, and so is loathe to give them any money for advertising. He needs to man up and stop ignoring his fiduciary responsibility to the company and do what right for business.
Re: Elon Musk started a price war that Tesla can't win - btfc - 11-12-2023
Tesla marketing has spoken…
Re: Elon Musk started a price war that Tesla can't win - Tiangou - 11-12-2023
Carnos Jax wrote: He needs to man up and stop ignoring his fiduciary responsibility to the company and do what right for business.
He won't resign.
Re: Elon Musk started a price war that Tesla can't win - Carnos Jax - 11-12-2023
Actually, I do wonder sometimes if that might help.
Re: Elon Musk started a price war that Tesla can't win - Fritz - 11-12-2023
yet, Tesla is still on many playuhs recommended b&h list.
the stock, that is.
don't care for musk or beezee or ellison, but I dunno that I'd bet against any.
but I'd bet against social media in a sec.
wishful thinking I suppose.
Re: Elon Musk started a price war that Tesla can't win - Carnos Jax - 11-12-2023
I’ve sold another third of my Tesla stock this year due to Musk’s antics, and put it into crypto. My portfolio now is 50% TSLA, 25% GBTC and 25% ETHE.
Re: Elon Musk started a price war that Tesla can't win - btfc - 11-12-2023
‘ If You Bought A Tesla One Year Ago It Has Lost As Much As $40,000 In Value ‘
“ As a result of the new prices coming down—and new incentives being introduced for which they were not eligible—used prices have tanked and these buyers are more upside-down in their cars than previously thought possible. A new Model X Dual Motor buyer today is paying $41,000 less than someone who bought the same car this time last year. “
https://jalopnik.com/if-you-bought-a-tesla-one-year-ago-it-has-lost-as-much-1851011677
Re: Elon Musk started a price war that Tesla can't win - Carnos Jax - 11-12-2023
Another example of sensationalistic headlines from a news source that has a ‘hard on’ for Tesla. You do realize Model X sales represent a tiny fraction of Teslas overall sales to begin with, and more importantly people who pay that much money for a car don’t really care about depreciation. The mindset of ultra-luxury car buyers are very different than most of the rest of us.
Re: Elon Musk started a price war that Tesla can't win - btfc - 11-12-2023
Diversify Now!