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Recently, the global price reduction of Tesla has triggered a heated discussion on the Internet. Yesterday, Tesla CEO Musk also said in response to the price reduction: there are a lot of people who want to buy Tesla cars but cannot afford them. These price changes have really had an impact on ordinary consumers. Tesla's sharp price cuts have created a wave of demand for electric car sales, addressing concerns that a weak economy will dampen buyers' interest.

Meanwhile, Mr Tesla Musk said: Tesla's demand in January was about twice its output. Without external interference, Tesla's sales could reach 2 million in 2023. And pointed out that Tesla is indeed worried about economic uncertainty and will "accelerate the cost-cutting roadmap and promote higher productivity" in the short term.

In fact, Tesla Musk also responded to the price reduction in an earlier post on the social platform, saying: "when the price of Tesla falls, people who have bought it want a lower price, but if the price goes up." people who have already bought do not make up for the price difference for Tesla, so that's it. "

I have to admit that Tesla's price reduction has indeed led to the growth of its sales, many stores have said: after the price reduction, the number of people in stores, trading volume have achieved several times growth. There are also media reports: orders for 30, 000 new cars were received in three days after Tesla China announced a big price cut. Behind Tesla's big price reduction, Tao Lin, vice president of Tesla, responded: "behind Tesla's price adjustment, there are numerous engineering innovations." in essence, it is a unique excellent law of cost control: including not limited to vehicle integrated design, production line design, supply chain management, and even millisecond optimization of robotic arm coordination route … Proceed from the "first principle" and insist on pricing at cost. "

The decline in cost is certainly one of the reasons for Tesla's price reduction, and the most fundamental reason may be related to Tesla's declining demand and overcapacity. Relevant data show that Tesla produced 439701 cars and delivered 405278 vehicles in the fourth quarter of 2022. In 2022, Tesla produced a total of 1369611 cars and delivered a total of 1313851 vehicles. Judging from the data, Tesla has excess capacity.

So since the fourth quarter of 2022, it is understandable why Tesla launched frequent price reduction promotions. Of course, the move also brought growth to Tesla's sales in the fourth quarter, with figures showing that Tesla delivered 405278 vehicles in the fourth quarter, up 31 per cent from a year earlier. Of this total, delivery of Model S and Model X models was 17147, an increase of 46 per cent over the same period last year. Deliveries of Model 3 and Model Y models were 388131, up 31 per cent from a year earlier.

In addition, according to Tesla's 2022 results, Tesla's fourth-quarter revenue was 24.318 billion US dollars, up 37 percent from the same period last year; net profit was 3.707 billion US dollars; net profit belonging to common shareholders was 3.687 billion US dollars, up 59 percent from the same period last year. Or because of the price reduction promotion, Tesla's gross profit margin in the fourth quarter was the lowest in recent years, falling to 25.9% from 27.9% in the third quarter earlier. However, Tesla said on the performance of the fourth quarter: the fourth quarter of 2022 is a record-breaking quarter, 2022 is also a record-setting year. Tesla CEO Musk also said that 2022 will be the best year ever for Tesla at all levels.

As for the price reduction, Tesla also said: the average selling price of Tesla's electric cars has shown an overall downward trend over the past few years. To become a manufacturer of millions of electric cars, it is necessary to improve the affordability of products. Although the average selling price of Tesla electric car has halved between 2017 and 2022, our operating profit margin has continued to improve, from about-14% to 17% over the same period. The increase in operating profit margin is mainly due to the introduction of lower-cost models, the construction of more efficient local chemical plants, lower vehicle costs and operating leverage. Judging from Tesla's expression, Tesla will continue to reduce prices in the future. In this regard, some industry insiders pointed out: Tesla's profitability provides room for its price reduction and pressure on competitors.

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