What Is Wrong With Tesla?

Things are going so great on the demand side – and reservations are so “not relevant” – for Tesla, according to what sneakily departing CFO Deepak Ahuja said on the company’s most recent conference call, that the company has decided to go ahead and cut the price of the Model 3 for a second time this year. And as one astute Twitter user pointed out, this year is only 36 days old.

According to Bloomberg, all versions of the Model 3 will see a price reduction of $1100, which lowers the starting price of the vehicle to $42,900. This follows a $2000 price cut on all Tesla vehicles that was announced in early January in order to try and offset the reduction in the United States federal tax credit that Tesla vehicles qualify for.

The news also comes after Tesla’s referral program ended at the beginning of this month. The details of the referral program were called into question last night on Twitter, when one well-known short seller tried to figure out how much Tesla had reserved for it by foolishly searching for the term in the company’s annual report and quarterly report, only to find (surprise) no information.

The company had been offering new customers free supercharger access if they were referred by a friend and some referrers have already “won” prizes like the company’s coming next generation roadster, which isn’t even in production yet.

Perhaps lowering prices for the second time this year is just Tesla getting a hold of costs. After all, Musk recently said on the company’s conference call: “I want to be a broken record about this: It’s cost, cost, cost, cost. Getting those costs down – variable costs and fixed costs – is what allows us to lower the price and be financially sustainable and achieve our mission of environmental sustainability. We have to be absolute zealots about this, there’s no question.”

Or perhaps it is Musk still struggling to figure out the magic price point he mumbled about while giving a crash (literally) course on exactly what demand isn’t, also on the company’s conference call:

The demand for – the demand for Model 3 is insanely high. The inhibitor is affordability. It’s just like people literally don’t have the money to buy the car. It’s got nothing to do with desire. They just don’t have enough money in their bank account. If the car can be made more affordable, the demand is extraordinary.

Here’s a hint Elon: $1,000 isn’t going to cut it. Maybe it’s time to start thinking about that $35,000 base model you promised nearly 3 years ago, even though with similarly priced competing offerings from electric vehicle peers hitting the market, that may no longer be enough.

Free "dummies guide" to trading options

Did you know trading options can actually be safer and more profitable than buying and selling stocks? Video and plain English training guide reveals how to get started tonight. 100% free.

Download now.

You May Also Like

About the Author: TTR Admin