Quote:
Originally Posted by LogicalApex
Actually, this has occurred in many boardrooms across the country and it is a valid competitive strategy for a short time or for a long time depending on the goals of the company.
The classic term for this is a “ loss leader” pricing strategy. Long term implementation of that strategy is done to drive sales in a more profitable section of the business (like selling a printer below cost to make it up selling overpriced ink). Another use of this is to attempt to corner a market early to maintain dominance once you’ve become entrenched and can push prices up.
Tesla may be leading the EV sales race right now, but they aren’t leading the car sales race overall and they have competitive headwinds that are getting very strong as traditional automakers aggressively move into EVs. Capitalizing on their current lead and branding might allow them to gain more new customers who will buy another Tesla and not end up in the EV of another brand in the future.
Business 101 |
That's how i see it.
They see their competition move in on this EV race so they slash prices to stay on top of the game. There is no doubt there are many MANY fans of teslas but most likely can't afford it, or justify the price to get the best bang for buck (even at it's current price point, or before the price cut) EV on the market today. That's why the 3/Y has done so well.
It might not be smart from a business standpoint, but that's not my forte. The only thing i see is that they see competition coming, so they cut prices to attract NEW buyers who might not want to introduce themselves to the EV world at the price point tesla has normalized in.
Smart but maybe not? Either way, elon is smart. So he knows what he's doing.
Car makers will catch up i'm sure. That's what i been saying. I can't wait to see this "25k tesla" elon has been cooking the past couple of years. He needs to introduce this to keep his EV crown on his head.