Tesla Is on both offense and defense in its price war
Musk is determined to position Tesla for continued expansion after the company fell short of its target for growth in vehicle deliveries last year. Cutting the prices of theand Y will make more of those models eligible for new US tax credits introduced by the Inflation Reduction Act.
During a Twitter Spaces conversation last month, Musk predicted a serious recession this year and warned consumers will cut back on big-ticket purchases. He called higher interest rates and lower demand a “double-whammy,” and said Tesla faced a choice. “Do you want to grow unit volume, in which case you have to adjust prices downward? Or do you want to grow at a lower rate, or steady?” Musk asked, rhetorically. “My bias would be to say let's grow as fast as we can without putting the company at risk.”
In that scenario, Tesla’s CEO said profits would be “lower to negative” during the recession, on the condition that its cash position is sound.
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