Messages were left Friday seeking a comment from Tesla. "They can afford to make this cut and not be lighting money on fire," Case said. ![]() If so, Tesla could manage to keep vehicle sales at sufficient levels. Unlike many of its rivals, though, Tesla can still make money on EVs for one crucial reason, Case said: The company enjoys high profit margins, thanks to manufacturing and battery efficiencies.Ĭompetitors generally lack Tesla's economies of scale and other efficiencies and may struggle to match the price cuts. "We think it's now more of a competition thing," he said. "I think the real driver for all of this is falling demand for Teslas," said Guidehouse Research e-Mobility analyst Sam Abuelsamid.īased on the current short delivery times for Tesla vehicles that once were months long, Tesla's once-sizable order backlog may have been depleted, said Scott Case, CEO of Recurrent, who analyzes the new and used EV markets.Ĭustomers either were awaiting this year's federal tax credits, Case said, or switched to competitors. Many investors fear that Tesla's sales slowdown will persist and have grown concerned about the erratic behavior of CEO Elon Musk and the distractions caused by his $44 billion purchase of Twitter. Since the start of last year, the stock has plummeted more than 65%. Tesla also reduced the base price of the Model 3, its least expensive model, by about 6%.įar from pleasing investors, the sharp price cuts sent Tesla shares down nearly 2% in late-afternoon trading Friday. That cut will make more versions of the Model Y eligible for a US$7,500 electric-vehicle tax credit, which will be available through March. The company dropped prices nearly 20% in the United States on some versions of the Model Y SUV, its top seller. ![]() ![]() slashed prices dramatically Friday on several versions of its electric vehicles, making some of its models eligible for a new federal tax credit that could help spur buyer interest. If local Chinese demand tails off, the company risks being stuck with fixed costs from unproductive men and machinery weighing on its income statement.With its sales slowing and its stock price tumbling, Tesla Inc. Tesla is expanding output in China at the same time it is servicing more and more European customers from its new German plant rather than from its Shanghai factory. This week is crucial for Tesla, as the entrepreneur is expected to sell billions of dollars’ worth of stock this week to finance his $44 billion Twitter deal before an Oct. The move comes as Musk looks to deliver on his promise for an “ epic end of year” in which the company hopes to grow volumes by roughly 50% and drive the stock price higher to achieve a $4.5 trillion market cap, higher than the combined value of the two most valuable companies today ( Apple and Saudi Aramco). Speculation over both had been rife in recent weeks. The combination of the price cut together with certainty over the run-out of the subsidy should now provide an impetus to those Chinese consumers that held off purchases until they had certainty. The ¥11,088 incentive is set to expire at the start of January (not to be confused with the recent extension of a tax break). The rear-wheel-drive standard-range version of the Model Y crossover saw its price cut to just below ¥300,000 ($41,312), the threshold to qualify for a national EV purchase subsidy that knocks the equivalent of an additional $1,500 off the vehicle.
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