Tesla cuts prices

January 18, 2023
< 1 minute

By Sorin Anagnoste

Strategy | Business Models | Tech

Tesla cuts prices

Source: Alex Castro / The Verge


Tesla’s cutting pricing smells like panic, not strategy. The company argues that:

At the end of a turbulent year with interruptions to the supply chain, we have achieved a partial normalization of cost inflation, which gives us the confidence to pass this relief onto our customers”, but -20% decrease? Really?!

My impression is that Tesla is going after two rabbits:

  1. Match delivery expectations amid increase competition (last year they delivered +40 YoY vs +50% expected)
  2. Look for an additional revenue stream: by reducing price while still being profitable the company will maintain (or even expand) the  market penetration to maximise higher margin service revenue later.

The real game changers will be the arrival of a real autopilot, if ever. But how long will that be a moat? Until Google, Apple or other companies figure it out. Regardless, it’s worth trying.

Discover posts:

iPhone 14 Pro marketing

Apple: “Emergency SOS” and “Crash Detection” safety features

From lifestyle to health & sports and then to safety. At the “Far Out” event Apple highlighted the fact that you can trust the company’s products for your own safety: “Emergency SOS” or “Crash Detection”. The latter was a service offered as a premium by some car companies (ie. BMW) (...)

Read more
Meta shares

Meta shares have decreased approx. 2.5x in the past year

Michael Porter defines strategy as competitive position, “deliberately choosing a different set of activities to deliver a unique mix of value.” Since 1 year ago the META shares have decreased approx. 2.5x and the pain is real: yesterday they announced that the metaverse “investments” are actually $15 billion…not $10 (to be (...)

Read more