Tesla CEO Elon Musk has said the company has adopted an aggressive strategy to slash prices on many of its popular models globally as the company on track to sell 2 million vehicles by 2022 Electric vehicles (EVs). Offering discounted models for Tesla has created a new wave of demand that will continue into the ongoing calendar year, Musk believes.
Tesla had expected to sell 1.8 million electric vehicles in 2022, but despite a strong performance in the fourth quarter, it still missed the target number. Musk is now considering getting Tesla back up to speed before doing more, and believes the company will reach its goal of selling 2 million electric vehicles globally by 2023, barring outside disruption. Factors such as the Covid-19 pandemic and supply chain disruptions have been major challenges to demand and production in the past.
The biggest discounts were offered on the Tesla Model 3 and Model Y EV, both of which are hugely popular in major EV markets like China and the US. The fate of China, in particular, is likely to determine Tesla’s performance in 2023. Competition here has been heating up, and while Tesla remains ahead, both global and local rivals have stepped up their game. So offering price cuts has been a way to ensure people continue to flock to Tesla showrooms.
Also read: Musk says Tesla’s Chinese rivals work ‘the hardest and the smartest’
But it’s not just about selling EVs at a lower price. It’s also about staying profitable and keeping investors happy. Musk himself has predicted that this year’s global recession will pose challenges even if demand for Tesla’s electric vehicles will remain strong. The company is trying to reassure investors that it can cut costs to overcome past recessionary woes and meet new challenges from rivals.
Then there’s the issue of the existing product offerings appearing rather outdated. Despite showing off new products on stage, Tesla hasn’t delivered much in the real world. In this regard, the long-delayed Cybertruck may dictate fate. The Tesla Cybertruck is expected to go on sale in late 2023.
(Input from Reuters)
First published date: Jan 26, 2023 at 09:55 AM CST
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