Connect with us

News

Tesla’s aggressive pricing strategy was explained by Elon Musk last month

(Credit: Tesla)

Published

on

There’s no denying that Tesla’s new pricing strategy is aggressive. In recent days, the electric vehicle community has witnessed Tesla practically go for its competitors’ jugular by giving its current vehicle lineup significantly lower starting prices. This was quite evident with the Tesla Model Y, which received notable price reductions across the globe. 

While Tesla executives such as Tesla China VP Grace Tao have remarked that the company’s pricing strategies have so far not been driven by the momentum of competitors, it’s difficult to argue against the notion that the EV maker now has some legitimate rivals. This is especially the case in China, where companies like BYD are seemingly putting pressure on vehicles like the Tesla Model 3. 

Interestingly enough, Tesla CEO Elon Musk actually provided an early explanation about the company’s new pricing strategy last month. During an appearance at a Twitter Spaces session, Musk explained that he would like to push Tesla’s rapid growth even if it meant that the company’s profits would take a hit. The CEO noted that long term, such a strategy would likely be proven correct. 

“‘Do you want to grow unit volume, in which case, you have to adjust prices downward, or do you want to grow at a lower rate or go steady? That’s sort of the choice there. My inclination would be to still grow. My bias would be to say like, ‘Okay, let’s grow fast as we can without putting the company at risk,’ which would mean that in that scenario, profits would be low to negative during a recession. Provided the cash position is okay, I think that’s still the right move long term,” Musk said

Elon Musk’s comments about Tesla’s cash position are quite notable. Over the years, Tesla has been growing its war chest, and during the third quarter of 2022, the company saw a $2.2 billion increase in its cash and marketable securities. With this amount added, Tesla’s cash and marketable securities reached $21.1 billion at the end of the third quarter. This was driven mainly by Tesla’s free cash flow of $3.3 billion, and offset partly by debt repayments of $900 million. 

Advertisement

More importantly, Tesla’s Q3 2022 Update Letter also highlighted that the company has “sufficient liquidity to fund our product roadmap, long-term capacity expansion plans, and other expenses.” This bodes well for Tesla in the coming years, especially considering the company’s increasingly ambitious goals, such as hitting 20 million vehicles per year by the end of the decade.

Elon Musk’s full Twitter Spaces session can be viewed here.

Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

Advertisement
Comments

News

EVs getting cleaner more quickly than expected in Europe: study

Battery-electric vehicles are still championing emissions reductions, and a new analysis suggests they’re doing so even more quickly than previously expected.

Published

on

Credit: Tesla

As Europe’s electricity mix is getting cleaner, battery-electric vehicles (BEVs) are also offering a larger climate advantage than previously expected, according to the results of a new study released this week.

On Wednesday, the International Council on Clean Transportation (ICCT) released a study noting that BEVs sold today produce 73 percent fewer life-cycle greenhouse gas emissions than internal combustion engine (ICE) vehicles, even factoring in production. This figure also represents a 24-percent improvement upon the organization’s 2021 estimates for this year, meaning that BEVs are getting cleaner more quickly than expected as the continent’s renewable programs continue to grow.

The study was comprised of a comprehensive life-cycle analysis of all major powertrain types, and the results suggest that BEVs are the only widely available powertrain that can slash emissions levels enough to meet climate goals. By contrast, the study’s results suggest that other clean energy powertrains, such as hybrids and plugin hybrids, only have a marginal impact, if any, on reducing the overall climate impact of the transportation sector.

“Battery electric cars in Europe are getting cleaner faster than we expected and outperform all other technologies, including hybrids and plug-in hybrids,” says ICCT researcher Dr. Marta Negri. “This progress is largely due to the fast deployment of renewable electricity across the continent and the greater energy efficiency of battery electric cars.”

Credit: International Council on Clean Transportation (ICCT)

READ MORE ON ELECTRIC VEHICLES: Study reveals hybrids could have up to 4.9x lifetime emissions vs. BEVs

ICCT Senior Researcher Dr. Georg Bieker says he also hopes the analysis can help fight misinformation regarding BEV powertrains. For example, he notes that, while it’s true that manufacturing emissions for BEVs can be up to 40 percent higher than for ICE vehicles, this is quickly offset by an electric automobile after just around 17,000 km (~10,563 miles) of driving.

“We hope this study brings clarity to the public conversation, so that policymakers and industry leaders can make informed decisions,” Dr. Bieker says. “We’ve recently seen auto industry leaders misrepresenting the emissions math on hybrids. But life-cycle analysis is not a choose-your-own-adventure exercise.”

Additionally, the ICCT study covers emissions from both vehicle and battery production, recycling, fuel and electricity production, fuel consumption, and maintenance.

“Our study accounts for the most representative use cases and is grounded in real-world data,” Dr. Bieker adds. “Consumers deserve accurate, science-backed information.”

U.S. EV adoption still on pace to reach 50% by 2030: data

Continue Reading

News

Tesla executive teases plan to further electrify supply chain

One of Tesla’s top executive hints at how Tesla is further electrifying its supply chain.

Published

on

Credit: Andrea Conway/X

A high-level Tesla executive has said the company is working to further electrify its supply chain, following a successful road test with the Semi this week.

After Tesla supplier thyssenkrupp completed a successful 5,000-mile winter trial with the Semi this week, Dan Priestley, the company’s Director of Semi Engineering, noted on X that the demonstration is a part of larger efforts to electrify more of the supply chain. The executive said that the company is already working to help suppliers like thyssenkrupp implement the Semi into their operations, particularly due to its cost savings and reliability.

Following the thyssenkrupp demo, the supply chain company has also begun integrating the Semi into its fleet, and Priestley suggests that more are still to come:

Working with our suppliers and logistics partners to electrify Tesla’s supply chain. With lower cost and higher reliability, it just makes sense. thyssenkrupp pushed the truck hard over this demo and now plans to integrate Semi into their fleet.

READ MORE ON TESLA SEMI: Tesla Full Self-Driving displays impressive collision avoidance with Semi

Tesla Semi factory nears official production as trials continue to impress

Tesla’s early Semi trials received positive results from both thyssenkrup and ArcBest’s ABF Freight this week, with the latter company logging 4,494 miles during a pilot period, and averaging 321 miles per day despite a 7,200-foot climb over Donner Pass.

The company has also been constructing a factory for volume Semi production at its Gigafactory in Nevada, and in recent weeks, the plant is looking nearly complete. Semi frames have been spotted in increasing numbers outside the facility recently, suggesting that Tesla is nearing early production on site.

The company also hired more than 1,000 workers for the Semi factory in April, while the plant is eventually expected to produce as many as 50,000 Semi units annually.

Tesla reveals Semi fleet data, shows off new feature and infrastructure plans

Continue Reading

News

Tesla Semi completes 5,000-mile winter trial with thyssenkrupp

The test covered nearly 5,000 miles in winter conditions.

Published

on

Credit: Tesla Semi/X

thyssenkrupp Supply Chain Services has completed a three-week pilot of the Tesla Semi at one of its California logistics hubs, marking a new step in the company’s sustainability push. The test covered nearly 5,000 miles in winter conditions and focused on evaluating the electric Class 8 truck’s efficiency, transparency, and operational performance.

Tesla Semi offers efficiency gains and real-time logistics visibility

During the pilot, the Tesla Semi was used for active freight delivery, including routes over the Altamont Pass. thyssenkrupp evaluated the vehicle’s ability to reduce downtime, enhance delivery speed, and offer greater real-time supply chain visibility, the company noted in a press release.

Live diagnostics and performance monitoring allowed the logistics provider to track metrics such as speed, routes, and overall efficiency—data that supports smarter and more transparent logistics operations.

“The Tesla Semi aligns with our ongoing commitment to sustainability and operational excellence,” said Bob Denehy, Chief Commercial Officer at thyssenkrupp Supply Chain Services. “Its efficiency and diagnostic features, and low environmental impact make it a natural fit for our evolving logistics strategy.”

Pilot builds on long-term partnership with Tesla and green energy goals

A logistics partner to Tesla since 2015, thyssenkrupp Supply Chain Services was one of the first companies selected to test the Tesla Semi in a real-world setting. The trial reinforces the company’s push into renewable energy logistics and reflects its long-term goal of integrating alternative-fuel technologies across its operations. 

Advertisement

Plans are now underway to begin adding electric Semis to its fleet as part of a wider emissions-reduction effort. The pilot is thus the latest example of how logistics providers are embracing next-generation transport technologies to meet environmental goals and enhance supply chain performance.

Continue Reading

Trending