Certainly the initial price cutting hurt competitors and drove increased Tesla sales while maintaining Tesla profitability.
But as Tesla continues its price cutting; prudent shoppers wait to see how much further pricing can drop-a brake upon sales. Likely last year Tesla purchasers are miffed as they paid thousands of dollars more for their vehicle than if they had waited.
Tesla 2023 gross profit seems to be on a razor’s edge even though sales[1] are way up.
https://www.macrotrends.net/stocks/charts/TSLA/tesla/gross-profit
Chart at above link.
https://www.axios.com/2023/10/18/tesla-earnings-third-quarter-elon-musk
Tesla fell short of expectations on its third-quarter profit and revenue as price cuts and increased investments off set higher vehicle sales.
Why it matters: As competition ramps up, Tesla cut prices about 25% in the third quarter, compared to the same period a year earlier, according to Cox Automotive’s Kelley Blue Book.
Driving the news: Tesla on Wednesday posted third-quarter revenue of $23.35 billion, up 8.8% from a year earlier but short of S&P Capital IQ expectations of $24.1 billion.
** The company recorded net income of $1.85 billion, missing estimates of $2.2 billion.*
The number of cars Tesla delivered to customers in the third quarter actually declined. Has the tipping point been reached? In the third quarter lower prices are not translating into higher sales.
I’m guessing US inventory rose because Tesla has cut pricing on US inventory.
https://www.msn.com/en-us/autos/news/tesla-discounts-new-cars-in-inventory-all-models-by-up-to-6-300/ar-AA1kpQ0C
Tesla has slashed prices of new, low-mileage inventory vehicles by as much as $6,300 in the United States.
Of course one quarter does not make or break a company. It will be interesting to see how Tesla proceeds in the future And see how share price is affected.