Tesla cut prices again this morning, and competitors, who have decided to either take the same strategy by slashing prices themselves or have chosen not to play into Elon Musk’s game, are in a weird and awkward position.
Tesla Model S and Model X units were the most recent vehicles in the automaker’s lineup to receive price cuts. While these vehicles only make up roughly 5 percent of Tesla’s overall sales volume based on last year’s sales figures, the price cuts give automakers with competing models another thing to think about.
Tesla Model X and Model S get price reduction in the United States
For startups, there are few that can even think about cutting costs at this point. Companies like Rivian, Lucid, and Lordstown are unable to shave prices currently and at the drop of a hat like Tesla. Every dollar and every sale right now counts, and there is not much wiggle room.
For traditional companies, the wiggle room on pricing for EVs is also extremely small. Ford, for example, while announcing plans to increase production of popular EV models this weekend, is still struggling with availability.
If you went to a Ford, GM, or other legacy dealership right now and tried to order a car, it might be extremely difficult, and people who just bought cars don’t want to see that their vehicle was just subjected to a price cut of thousands of dollars. When Ford cut Mustang Mach-E prices earlier this year, owners who took delivery just before the decreases were not pleased, and the automaker couldn’t do much to appease them.
Tesla’s strengths are plentiful, and they expand across nearly every part of its business. Its charging infrastructure is strong, the company can get you a car in a matter of a few weeks, and its pricing can be adjusted at any moment.
If it needs to adjust prices to make margins a little more appealing to investors and analysts, it can. If it needs to spike demand with a dramatic cut like it did this morning, it can do that too. It’s not a perfect company, though. Service and Customer Communications for Tesla are incredibly weak; it is one of the most publicly-criticized portions of the company. Despite that, people continue to buy Teslas in droves.
With another Tesla price cut, companies are in a serious pickle. Tesla could decide in a week to cut prices again, making consumers more prone to choose their product over another. The advantages go past price, but what that number says is the first thing consumers look at when considering a vehicle. The lower they get, the more attractive they become to consumers.
Why Tesla dropped the prices of the Model S and Model X is unknown, but Gary Black seems to believe the move is to encourage more sales of the flagship vehicles, which, as previously mentioned, do not contribute to the company’s overall sales volume very much.
.@Tesla is cutting prices for the second time this year. But investor @garyblack00 tells @SaraEisen that he’s not worried about demand, explaining that they’re trying to adjust prices to encourage growth for the Model S & X vehicles. pic.twitter.com/zOobHZDRJE
— Squawk on the Street (@SquawkStreet) March 6, 2023
However, there are other things: Model X vehicles are being equipped with the new Hardware 4 computer, Tesla has tried to get Free Supercharging-equipped cars off the roads, and it could be another way to push sales upward.
Whatever the reasoning is, Tesla put competitors in another weird spot. With the constant price changes that occurred earlier this year, there was already doubt in place about what competitors could do to remain competitive. The most recent adjustment in prices makes things even more difficult and reminds everyone that Tesla is ultimately the king of the hill.
Disclosure: Joey Klender is a Tesla Shareholder.
I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.
Tesla owners are being doxxed by a controversial anti-DOGE website in what it called an act to “empower creative expressions of protest.”
Dogequest, a website that has been created with a clearly outlined use for intimidation against Tesla owners, posted the names, addresses, phone numbers, and other contact information of those who own vehicles made by the electric vehicle manufacturer.
It was spotted by 404 Media.
The site also claims to have the information of employees at the Department of Government Efficiency, as well as the addresses of Tesla dealerships and the locations of Tesla Superchargers. The latter two are public information.
However, the website is hoping to get Tesla owners to sell their vehicles in this evident intimidation tactic. However, the information on the website, while it was seen, was not verified to prove that it contained the information of real-world Tesla owners. The site was not accessible by Teslarati at the time of publication.
The creation of a site like Dogequest is just another level that anti-Elon Musk activists are taking to attempt to destroy a company like Tesla as its CEO works with the Trump Administration to eliminate excessive government spending through the work of DOGE.
It is also the latest attack on Tesla owners, who have seen their vehicles vandalized, damaged, and even destroyed by those who disagree with the actions of Musk.
Tesla as a company has also seen several acts of retaliation against it, as everything from the arson of its showrooms and vehicles to it being kicked from the popular Vancouver Auto Show have come as a result of the recent backlash against the company.
Moving forward, there are still questions surrounding how these attacks will be combatted. The Trump Administration has indicated that acts of vandalism against Tesla would be considered a federal crime, but the tricky part of locating the culprits has proven to be extremely difficult. Only a handful have been found and held accountable.
Tesla (NASDAQ: TSLA) received an upgraded rating on its shares from Wall Street firm Cantor Fitzgerald, who recently took a trip to Austin to visit the company’s data centers and production lines ahead of several high-profile product launches set for this year.
It was a bold move, especially considering Tesla shares are under immense pressure currently, fending off negative news regarding the company’s sentiment and potentially lower-than-expected delivery figures due to the launch of a new version of its most popular vehicle, the Model Y.
However, the bulls on Wall Street are still considering Tesla to be a safe play, especially considering its robust presence in various industries, including automotive, energy, and AI/Robotics.
Cantor Fitzgerald analyst Andres Sheppard said in a note that, during a recent visit to Tesla’s Cortex AI data centers and the production line at Gigafactory Texas, it was clear there is a lot of potential and runway for Tesla in 2025:
“On 3/18, we visited Tesla’s Cortex AI data centers and the factory’s production lines ahead of the company’s introduction of its Robotaxi segment (targeted for June in Austin, followed by CA later in 2025). With Tesla’s shares now down ~45% YRD, we upgrade Tesla to Overweight (from Neutral) ahead of upcoming material catalysts. Our $425 12-month PT is unchanged. Our Thoughts: Attractive Entry Point Ahead of Material Catalysts.”
Sheppard went on to mention the catalysts, which he believes are the Robotaxi rollout in Austin in June, along with the continued rollout of Full Self-Driving in China, the eventual rollout of FSD in Europe, and the introduction of the affordable models in the first half of this year, and those were just on the automotive side.
There are several others, including Optimus, growth in the energy division, and in the longer term, the Semi.
In terms of potential weaknesses, Sheppard expects the likely removal of the EV tax credit and some of its growth to be offset by tariffs as the two big things that stand in the way of even more growth for the company.
Tesla is up over 5 percent on Wednesday, trading at $236.86.
Tesla has been kicked from a popular automotive show as the organizers of the massive event have succumbed to the pressure of protestors and others who oppose the electric vehicle maker.
The Vancouver Auto Show in Canada announced that it would not allow Tesla to establish a presence at the event this year, citing concerns about potential disruption from protestors and others who have been vocal about their distaste for the company and its CEO, Elon Musk.
Eric Nicholl, executive director of the Vancouver Auto International Show, said (via The Hill):
“The Vancouver Auto Show’s primary concern is the safety of attendees, exhibitors, and staff. This decision will ensure all attendees can be solely focused on enjoying the many positive elements of the event.”
Tesla was reportedly given several opportunities to voluntarily withdraw from the Vancouver Auto Show. The company evidently declined these invitations. Reps of the event itself then took it into their own hands, stating that the company would not be welcome at the event any longer.
Musk’s involvement in the Department of Government Efficiency (DOGE) under the Trump Administration seems to be the main culprit for so much pushback from the opposition.
Protest groups and organizers have put together various acts of opposition against Tesla, some more reasonable than others, in an effort to show their distaste for the company and Musk. However, many of these acts have turned violent, resulting in the vandalism or even the total destruction of vehicles. It’s one thing to use your right to protest, and it’s another to destroy people’s personal vehicles or property that belongs to the automaker.
The decision by the Vancouver Auto Show sets a dangerous precedent that the violence and destruction tactics used by groups that oppose Tesla will work. Ultimately, people’s safety is most important, but there is the impression that shows will not take the proper precautions to ensure that all companies are able to show off their products and tech at the event.
This could have been resolved with other strategies, and axing Tesla from the show altogether could result in some fans boycotting the show altogether.
Tesla owners doxxed by controversial anti-DOGE website in clear intimidation tactic
Tesla gets an upgrade on ‘upcoming material catalysts’
Tesla kicked from popular auto show as event succumbs to protest pressure
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