Tesla Shares Drop After Price Cuts Barely Boost Deliveries
This article from Bloomberg may be of interest to subscribers. Here is a section:
After Tesla cut prices of its top-selling Model Y by as much as 20% and discounted its most expensive vehicles by tens of thousands of dollars, Musk said in late January that orders were running at almost twice the rate of production. The figures reported Sunday indicate there was a slowdown later in the quarter, as the company ended up making almost 18,000 more cars than it sold.
“Continued excess production over deliveries will keep the debate going on price elasticity versus general demand weakness,” Philippe Houchois, a Jefferies analyst with a buy rating on Tesla stock, said in a note.
If you cut prices and sales don’t jump there are only two options. Either you have the wrong price or the wrong product. I bought a new car a year ago. I test drove a Model Y and Model 3 and decided to go with another SUV instead. The price points were about the same after added extras and the subsidies did not apply because of income limitations. That seems like a major issue for Tesla. They are attempting to compete with luxury brands on quality alone. That is a hard sell against brands with decades of reliability and customer relationships.Click HERE to subscribe to Fuller Treacy Money Back to top