Tesla Speed – The EV Price Cuts
Innovators are often the most known brand in a specific industry, although they are not always the original. Netflix wasn’t the first streaming service, but its innovations set it light years away from any competitor in its early years. Even things like Oreo cookies were able to completely blow out older competitors due to smart business decisions made by the company, and it shows how valuable certain choices are for a long-term outlook. This can be found in our rapidly growing industries today, with electric vehicles being a great example.
Our innovator here is Tesla, and one of Tesla’s decisions has really seemed to move it ahead of the rest of the pack. In a conference earlier this month, CEO Elon Musk reiterated that Tesla is looking forward to making smaller, next-gen vehicles that would cut production costs in half. This isn’t mere speculation as improvements in vertical integration and factory automation are goals the company is working towards. Tesla already has thousands of dollars in cost advantages over other EV companies according to analysts, and this is only increasing as we see companies like Ford still struggling with supply chain issues. Tesla has managed to maneuver around the semiconductor shortage and issues regarding factories in China to keep heading forward, a major competitive advantage. This vision, paired with Tesla’s recent price cuts, are continuing to mount pressure on other electric vehicle manufacturers like Volkswagen, who are still having to place high prices on their vehicles to cope with the costs. Many analysts fail to see how EV businesses will catch up with Tesla, and as they continue to be the name brand for the industry it seems as if they are going to dominate barring any negative news.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.