SAN FRANCISCO, Jan 26 ― Elon Musk has a playbook for Tesla headed into what he believes will be a “serious” recession: cut costs on everything from parts to logistics,...
SAN FRANCISCO, Jan 26 ― Elon Musk has a playbook for Tesla headed into what he believes will be a “serious” recession: cut costs on everything from parts to logistics, while keeping the pressure on competitors with discounted sticker prices.
But Chief Financial Officer Zachary Kirkhorn said the company would also be “attacking every other area of cost and unwinding cost increases created for multiple years of Covid-related instability.” Tesla is also cutting costs by redesigning elements of battery and electric motor systems, removing features that owners are not using, based on data collected from Model 3 sedans and Model Y SUVs on the road, the company said.
Meanwhile the cost of lithium in EV batteries ― the single most expensive component ― will be higher in 2023 than last year, Kirkhorn said, a pressure that will hit Tesla's rivals that are still losing money on EVs harder. Tesla slashed prices by as much as 20 per cent earlier this month, a move that broadened the range of its line-up that qualifies for tax credits of US$7,500 per vehicle in the United States.
Bringing costs down is also key to the next phase of Tesla's expansion, which Musk hinted the company would detail at its investor day in March: plans for an affordable EV that analysts have expected to be priced below US$35,000.
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