With just a small change, Tesla revalued the entire electric car market: Reducing the price of a car model by several thousand dollars overnight, consumers … shocked

Tram Ho

This move of Tesla is causing mixed reactions among investors and Wall Street experts.

Tesla’s move to reduce the price of some models is affecting the entire car industry, putting pressure on many competitors and directly affecting consumers’ car buying decisions, including Stanly Tran.

The sale of up to 20% off some of the best-selling Model Y versions earlier this month shocked him. The 32-year-old California psychotherapist was originally on Ford’s waiting list, but decided to pull out and buy the Model Y.

“Unbelievable,” Tran recalls. He said the Model Y is more competitively priced than Ford’s Mach-E line.

Tesla’s move has caused mixed reactions among investors and Wall Street experts. Some argue that this policy is intended to overcome weak demand, while others assert that Tesla is intentionally trying to squeeze competitors by “sacrificing” a little profit. Tesla customers who buy a discounted car will be eligible for a $7,500 federal tax credit.

However, whatever the reason, Tesla’s price lowering is forcing competitors to consider lowering prices to convince investors and car buyers that they are one of the alternatives. best fit. Some used car dealers are also affected. Some models lose several thousand dollars overnight.

Currently, the starting price of the Model Y is around $53,000, down from $66,000 previously. This figure is still higher than the Mach-E series, but lower than some of Ford’s high-end EV versions. The Model Y is currently about $10,000 less than the Cadillac Lyriq, a similarly sized SUV.

Under a bill passed last year, some Model Y and Model 3 buyers would be eligible for a $7,500 subsidy if the cars cost $55,000 or less. Previously, they had absolutely no chance of receiving subsidies due to manufacturers’ limits on total electric vehicle sales.

Chỉ bằng một thay đổi nhỏ, Tesla định giá lại toàn bộ thị trường xe điện: Giảm giá 1 mẫu xe tới vài nghìn USD chỉ sau 1 đêm, người tiêu dùng… sốc - Ảnh 1.

Tesla’s move to reduce the price of some models is affecting the entire car industry and putting pressure on many competitors.

“The fact that the Fed raises interest rates makes cars more expensive. Auto companies are also in trouble,” Musk said.

Currently, traditional automakers smaller than Tesla are facing losses or low margins, according to Bank of America analyst John Murphy. Tesla’s price cut could put pressure on these companies to continue cutting costs, leading to a price war.

“These discounts can make it harder to do business,” said John Murphy.

“This highlights the diversification of electric vehicle prices. That is exactly what we are doing,” said a GM representative.

According to research website Edmunds, the number of buyers of Tesla-research vehicles surged after a price cut in early January. The Model Y was the second most-considered vehicle for the week ending January 15.

Also shortly after the announcement of the price cut, applications for financing for Tesla vehicles tripled at Tenet, a New York-based startup that provides financing for EV buyers. Tenet CEO Alex Liegl said customer numbers are still growing.

Howard Drake, who owns Cadillac, Buick-GMC and Subaru dealerships in the Los Angeles area expects Tesla’s lower prices to attract more customers looking for electric vehicles. “In a place like LA, it’s re-valuing the entire midsize luxury SUV market. The electric vehicle market will feel this most clearly, then everything will be affected,” said Howard Drake.

Chỉ bằng một thay đổi nhỏ, Tesla định giá lại toàn bộ thị trường xe điện: Giảm giá 1 mẫu xe tới vài nghìn USD chỉ sau 1 đêm, người tiêu dùng… sốc - Ảnh 2.

Tesla’s move has caused mixed reactions among investors and Wall Street experts.

Meanwhile, used Tesla dealers say the value of some models has dropped by several thousand dollars after the sale. In the first 17 days of January alone, prices for 2020 or newer but used Teslas fell about 25% from last June, which is almost double the rate of decline across the industry during the same period. period.

“The market is weakening. When new car prices fall, used car prices will suffer,” said Shaun Del Grande, president of the large group of dealers in the Bay Area, a hot spot for electric vehicles.

It is known that Tesla has changed its marketing strategy in China in the context of fierce competition from domestic rivals putting its growth plan at risk. Specifically, Tesla extended insurance benefits up to 8,000 yuan ($1,100) for new buyers, redeployed a user referral program and advertised products on a local TV shopping channel. This is said to be extremely rare, especially for a company that once boasted that there was no need for traditional advertising campaigns.

In addition, Tesla first surveyed potential customers and asked them to designate a few specific cities for the company to launch a test drive program. Previously, customers could only go to the nearest Tesla showroom to do this.

In addition, Tesla also launched an incentive program for owners to refer family and friends to buy Tesla cars. They will be given small gifts, such as wireless headphones, a stroller, the opportunity to visit the Shanghai factory, or a free use of Tesla cars for a year. Last month, the company closed its flagship showroom in Beijing’s Parkview Green shopping mall.

“We anticipate some more promotions to boost demand and delivery before the end of the year,” said Junheng Li, CEO of equity research firm JL Warren Capital LLC at the time.

By: WSJ, Bloomberg

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Source : Genk