Tesla will lower prices of its cars – if the inflation slows down. According to Elon Musk, Tesla will reverse the price reductions on its vehicles if supply chain issues no longer constrain it. He humorously quips that if inflation eventually calms down, he will lower the prices of Tesla’s cars.
If you remember, when first-generation electric cars were costly, people were promised that they would be much cheaper once production scaled up and costs decreased. Then we got a pandemic and an invasion in Ukraine to create issues for manufacturers, which led to shortages that caused the cost of raw materials and other things to rise exponentially.
Tesla will lower prices of its cars – if the inflation slows down
Production ramped up, but prices kept going up. Tesla was in pretty good shape until its margins started rising, and profits were significantly higher than they used to be. Tesla’s net margin has grown considerably over the last four years and currently stands at 13.5%.
The company still offers a price reduction, but this time it applies only to cars produced six months ago or less because it isn’t feasible to determine what their costs will continue to be while ramping up production.