Elon Musk on electric vehicle price cuts

Illustration for column about Tesla and climate change

Image: Sarah Grillo/Axios

Tesla on Wednesday reported record fourth-quarter profits and sales, but acknowledged it needs to make cheaper vehicles to become a bigger automaker.

Details: The company reported fourth-quarter net income of $3.69 billion and revenue of $24.3 billion, up 59% and 37% year over year, respectively.

  • Both reflect best-ever quarterly results despite a continued slowdown in the critical Chinese market.
  • The company sold 405,278 vehicles in the fourth quarter, up 31% year over year.

Why it matters: Tesla is under pressure to regain momentum after showing signs of a sales slowdown and a stock price plunge amid a broader industry pullback and CEO Elon Musk’s controversial management of Twitter.

  • Tesla stock lost around two-thirds of its value in 2022.

What you say: Tesla acknowledged in an earnings presentation on Wednesday that its prices are “on a downward trend,” but said it “needed to become a multimillion-dollar vehicle maker.”

  • The company pledged “relentless cost control and cost innovation” to preserve profit margins.

The big picture: What investors are most interested in is whether the recent round of general price reductions Will pay off.

  • “All eyes will be on what that does in terms of sales promotions and profit margins,” Autotrader analyst Michelle Krebs told Axios.

Context: Two weeks ago, Tesla reduced the prices of its US vehicles by an average of $10,000, according to Evercore ISI. These cuts are not reflected in the fourth quarter earnings report.

  • Morgan Stanley on Wednesday estimated that Tesla prices would average between $45,000 and $48,000 in 2023.
  • “In our view, the price cuts are actually a response to the slowdown in additional demand relative to additional supply,” Morgan Stanley analyst Adam Jonas said in a research note ahead of the earnings report.

Zoom out: Part of Tesla’s problem is that it hasn’t introduced a new consumer vehicle in years, despite increasing competition from General Motors, Ford, Volkswagen, Hyundai, Rivian, Lucid, and others.

  • “They have an aging product line — a very limited product line — and a promised pickup that we haven’t seen,” Krebs said.
  • Tesla says the long-launched but not yet produced Cybertruck is on track to start production “later this year” in Texas – and it says it has “additional details” about “our next-generation vehicle platform” will deliver “On March 1st

Worthless: Tesla is confident enough in its future growth to announce plans on Wednesday to invest more than $3.6 billion to build a new semi-assembly plant and battery cell factory alongside its existing “Gigafactory” near Reno, Nevada to build.

ًں’ Our thought bubble: As competition intensifies, Tesla is starting to look more like a traditional auto company that has to do things like lower prices or increase incentives when demand slacks.


Hey, I am Sakib Hossain Sojib, an entrepreneur known as an SEO Specialist, Digital Marketer, Blogger, and Content Creator. I have a team of researchers who guide and review products for our audience to help them by providing valuable information to help our audience makes the best decisions for their needs. I love to take care of my cars. So, I like and enjoy car maintenance and automotive research. The provided content is based on my learning, research, and understanding of the topic and its concept. Our extensive experience in the industry allows us to offer unique insights and perspectives on the latest trends and products. We aim to educate and empower our readers by providing them with the knowledge they need to make informed decisions about their needs.

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