Tesla's Price Cut Works
In the first quarter of this year, Tesla delivered 422,900 vehicles, an increase of 36% over the same period last year, an increase of 4% over the fourth quarter of last year, and higher than Wall Street's expectations of 421,200 vehicles.
But Musk mentioned in his last earnings call that deliveries would increase by 50% in 2023. For the rest of the year, they're going to have to speed up deliveries.
Among them, the high-end Model S and X sold 10,695 units, accounting for about 2% of the quarter's deliveries. The main models Model 3 and Model Y have delivered a total of 412,180 units.
In addition, Tesla's production has reached a new high, reaching 441,000 units.
Tesla's price cuts have indeed played a positive role, especially in expanding market share and car sales.
In the first quarter of this year, Tesla’s various products have significantly reduced prices. In January, Tesla cut the price of the base Model Y by 20% and the price of the high-performance Model 3 by 14%.
After the investor day in March, Tesla's high-end models also slashed prices, with the base price of the Model X falling from $109,990 to $99,990, a drop of about 9%.
Tesla will launch cheaper cars, expand its product line, and further increase production capacity at new factories in Germany and Austin. In March, Tesla also announced plans to build a new factory in Monterrey, Mexico.
Now everyone is most concerned about whether the profit margin can be maintained above 20% after the price cut and whether the total profit can usher in growth.
Considering the fierce competition in the new energy vehicle market, in the current macro-environment, I personally think that Tesla’s approach of lowering prices to preserve market share is correct. Subsequent companies can increase profits by raising prices and reducing costs. Need too much rush.
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