Tesla lowering prices by 7K to 13K is going to devastate the company in the long term.
For starters, the profit margin on each car is going to plummet, deeply affecting their revenue. Expecting sales to be up, but earnings way down.
What does this mean for Tesla? Well, for starters, it means they’re getting more in line with the rest of the car industry - which is a thin margin business.
That might work for a company like Toyota with very strict production controls. However, Tesla is a hot mess.
How does Tesla get their prices back up on mainstream models? They don’t have any new cars on the horizon, They are selling a rapidly aging NINE-year-old car and a five year old car.
It costs hundreds of millions to bring new cars to market. It’s going to be a cash crunch.
Don’t discount what’s going to happen to used car dealers. They are stuck with excess inventory. They are going to get absolutely devastated on selling.
So you’re going to see a glut of dirt cheap Teslas on the road picked up by a clientele not inclined to service them.
This is going to result in these cars failing across-the-board more than they already do.
You’re going to say horror stories of working class people buying these things, and having the battery packs fail, and not having $10-$15,000 of cash to fix them.
Porsche doesn’t lower their prices to pump the stock price. They are playing a long game in the luxury market.
Tesla isn’t a luxury car, but it pretends to be. And right now we’re seeing the consequences of a complete lack of leadership.