Tesla’s luxury EVs is flagging, and the company has responded with major global price cuts—as much as 20% in some markets.
For years, Tesla has seemed unstoppable — the stock price long ago soared beyond what most folks thought was reasonable. Conventional wisdom was that only a drop in demand would bring the TSLA rocket ship back down to Earth.
The press has certainly been piling on — from EV media outlets to major newspapers to lifestyle mags that typically mention Tesla only a couple of times a year, almost everyone seems to agree that the price cuts signal shrinking demand, and often the beginning of the end. A typical headline:Now, there are some aspects of the party line that would be hard to argue with.
All that aside, here’s a dissenting view: Tesla’s price cuts are indeed bad news — but not for Tesla. Tesla’s price cuts could bring Models 3 and Y within reach of a much larger pool of car buyers. Hopefully, more buyers will mean more rave reviews, leading to even more buyers, and hopefully Tesla will be able to respond to the increased demand not by jacking prices back up, but by increasing production — it has two new Gigafactories that aren’t producing at anywhere near their potential capacities.
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