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Comment by sebzim4500 | Hacker News Reader

Are there metrics in which Tesla sales are dropping? I can't find any by googling, but I also can't find accurate data for the last two quarters.

If your evidence for this 'finding out' is purely the prevailing sentiment of HN/reddit/twitter, then I would mostly disregard it.

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Tesla is still selling every vehicle they can produce. They are still supply constrained.

They sold more EVs last quarter than their competitors combined all last year.

Why are they cutting prices, then?

Tesla is in an infinite loop of building efficiencies and lowering manufacturing costs.

Elon has said many times that the lower the price of a car, the more market share opens up.

Their margins are in the 20-25% range whereas a legacy auto maker is below 13%.

There is a lot of room to cut prices and still make money.

Well that's confusing, people seem to be claiming different things. One is that they sell cars as fast as y If they continue to 100% sell out, why reduce margins?

Hmmm, message got mangled.

"Well that's confusing, people seem to be claiming different things. One is that they sell out immediately, the other is that they need to reduce margins to increase the market size. If they continue to 100% sell out, why reduce margins?

Manufacturing capacity and output are also increasing as they build more Gigafactories and optimize existing ones. The price changes are an optimization to balance sales and production output to avoid shortages or inventory.

Because they want to undercut all their competition. Their profit margins are insane compared to every other car maker especially in the EV space. It puts more downward pressure on Ford, VW, Kia, etc to cut into their already razor thin margins.

Tesla could sell the model 3 at 30K and still make a profit but they have zero reason to do that.

Because they have inanely high profit margins since their cars have something like 1/10th the number of moving parts, making them remarkably cheap to manufacture.

Lower prices = more market share.

But wouldn’t other manufacturers EVs ALSO have fewer moving parts? Why are there margins so thin?

I think this is still true but worth noting more recent data shows inventory climbing[1]. I don't think it's drastic yet - just a reflection of the economy contracting. Price drops are keeping them moving but at the cost of their traditionally excellent profit margin.

1. https://twitter.com/TSLAFanMtl/status/1642700991341494272 (random Twitter source, no other verification done but I have seen this mentioned in a few places. Could be short propaganda I guess!)

> Tesla cuts US prices for fifth time since January

https://www.cnn.com/2023/04/07/business/tesla-cuts-prices/in...

It seems like there is some effect or they probably wound't be cutting prices.

They are cutting prices because they are cutting manufacturing costs. They are able to obtain the same margin after lowering the prices. The price cuts result in more sales.

That would only be true if production had stagnated, which isn't the case. If they produce twice as many cars as they did last year, cutting prices does not mean that they are selling less due to the twitter takeover.

I expect sales are trending upwards but maybe not as quickly as they forecast- the price drops kind of speak for themselves imho.

In my opinion they are on track to meet the 1.8M deliveries forecast. The only question is how much margins were hit with the price drops.

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