Tesla, a leading seller of electric vehicles, has recently lowered their prices, putting them in direct competition with gasoline cars. This move is estimated to cost the company $1.2 billion per year, according to a knowledgeable investor.
The base Model 3 sedan now starts at $38,990, which is $8,700 less than the average cost of a car or truck in the U.S. Similarly, the starting price for the Model Y SUV is $3,700 below the average price of automobiles, which is around $48,000. Bloomberg Green conducted an analysis to determine these figures. Tesla began reducing prices at the beginning of this year, putting pressure on traditional automakers who were already struggling to make a profit from electric vehicles.
The price decreases have led to a divergence in investor opinion. While Tesla’s share price wasn’t significantly affected by last week’s cuts, some investors, like Gary Black from the Future Fund, predict that these price reductions will cost Tesla $1.2 billion annually starting in 2024. Black has a significant following on X (formerly known as Twitter) and has used his platform to advocate for Tesla to focus on advertising campaigns instead of lowering prices.
Sam Korus, an analyst at Ark Investment Management, believes that this is just the beginning of cost declines for electric vehicles. He states, “There is no reason why battery costs or EVs should halt their price declines at price parity. The product can continue to cost less, or it continues to sit in the same price segment and performance improves.”
Not only has Tesla reduced prices on their base models, but they have also lowered the prices of their higher-end vehicles, the Model S and Model X, making them more affordable than the average transaction price for cars in the U.S. According to Edmunds, the price benchmark for new vehicles in September was $47,698.
Some view these price cuts as a means of maintaining demand following Elon Musk’s acquisition of Twitter (now known as X Corp.) and his increased involvement in right-wing politics. Ross Gerber, CEO of Gerber Kawasaki, expresses his concern, saying, “Sadly Tesla continues to have to cut prices to sell cars… Piss off core demos and kill margins to unload inventory. The master plan!”
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
