Tesla strategy to fuel ev sales

Tesla, the leading electric vehicle (EV) manufacturer around the globe, has been making waves in the automotive industry with their cutting-edge technology, innovative strategies, and their idea of reducing prices to increase sales.

This specific strategy has been applied in different markets across the world, including the US, China, and India. But is it working? Read below.

Why is Tesla Cutting Prices?

Tesla's strategy to keep cutting prices is based on a simple yet effective premise: to make their vehicles more accessible to consumers.

As demand for EVs grows in every country, Tesla is hoping to capitalize on this trend by making their cars more affordable, which will help them reach a wider consumer base and increase their sales significantly.

How Does Tesla Cut Prices?

Tesla has adopted several strategies to cut prices, such as reducing the cost of the car's components, introducing new models in the market, and offering discounts or special payment conditions.

  1. Reducing the cost of the car's components – This involves sourcing cheaper components from suppliers and using more efficient production methods.
  2. Introducing new models in the market – The ones with lower price tags, such as smaller vehicles or fewer features. But still electrics!
  3. Giving discounts – To customers who buy multiple vehicles or even offering special incentives to those who purchase their cars online, for example.

And does the strategy bring benefits?

What are the Benefits of Tesla's Price-Cutting Strategy?

There are several benefits from Tesla's strategy of cutting prices. Some of them are obvious, and some may not be that obvious at all.

  • It helps to make their vehicles more affordable, which could lead to a surge in sales.
  • It could also help to attract more customers to the brand, as people are more likely to purchase a vehicle when they know it is more affordable.
  • It could help to boost Tesla's reputation as a company that's willing to go the extra mile to make its cars more accessible.

But there are some potential drawbacks to it too.

What are the Drawbacks of Tesla's Price-Cutting Strategy?

One of the main issues is the risk of Tesla's cars proving themselves not as profitable as they should be, which could lead to a decrease in profits and harm the company's growth. There is also a risk that Tesla's competitors may try to undercut them by offering even lower prices, which could lead to a "price war".

Tesla's strategy of cutting prices is a bold and innovative move, but the company has to consider those potential drawbacks before the plan gets implemented for real.