Tesla Price Cuts: Expected, Brilliant, Timely And Expect More

Summary:

  • The January 2023 reduction in the car prices by up to 20% on some Tesla, Inc. models came as a shock that no one expected.
  • The price cut not only increased demand for Tesla’s products, but also delivered a pre-emptive strike to the competition.
  • The temporary drop in the margins resulting from this price change is only transient, and Tesla’s margins are expected to grow up to 40% within five years.
  • Even with this drop in the auto prices, my analysis is still showing that Tesla is potentially a $3T company.

Tesla store with customers inside at night in Asia

Tesla Cuts Its Prices

Robert Way/iStock Editorial via Getty Images

What prompted this article?

Tesla, Inc. (NASDAQ:TSLA) auto price cuts of up to 20% for some of its models is quite remarkable. When we add the $7,500 U.S. Federal Tax Credit, we would discover

Source: Compiled by Author from Tesla Car Price History; Data from 2018/05/20 at $78,000 to 2023/02/12 at $53,900.

Source: Compiled by Author from Tesla Car Price History; Data from 2018/05/20 at $78,000 to 2023/02/12 at $53,990.

Source: Inside Tesla Fremont Factor, Tesla.com

Source: Inside Tesla Fremont Factor, Tesla.com

Source: Twitter, @matty_mogul

Source: Twitter, @matty_mogul

Source: Copy of the Valuation Spreadsheet created by Author

Source: Copy of the Valuation Spreadsheet created by Author

Source: Created by Author from Valuation Spreadsheet

Source: Created by Author from Valuation Spreadsheet


Disclosure: I/we have a beneficial long position in the shares of TSLA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I don’t own a Tesla, but rather an Camaro (ICE); My next car will be a Tesla.


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