Shulou(Shulou.com)11/24 Report--

CTOnews.com April 16 news, recently, Tesla in the United States opened the fifth price reduction in 2023, causing widespread concern from the outside world. Some people think that Tesla is waging a price war between electric vehicles and internal combustion engine cars, while others wonder why Tesla should cut prices at a time of strong market demand.

Musk responded on Twitter. "We are not 'waging a price war', we are just lowering prices to achieve large-scale affordability," he said. " What he means is that Tesla's goal is not to beat competitors, but to make electric cars affordable to more people.

CTOnews.com noticed that Tesla's price reduction was astonishing. The price of the Model Y, for example, fell by 24% in 2023, from $54000 to $41000. This is very rare in the auto industry, because usually, new cars will gradually raise prices after the launch to maintain profit margins. Tesla, on the other hand, is doing the opposite, constantly reducing costs and prices, even making the price of Model Y lower than the average price of a new car in the United States ($46000), and can enjoy tax breaks provided by the federal government.

Why did Tesla do this? Some analysts believe that Tesla does not rely on traditional media advertising to promote his products, but through social media and word-of-mouth to attract consumers. Tesla and Musk, who have hundreds of millions of followers on Twitter, attract attention by posting the latest product information and technological developments. Therefore, Tesla can save a lot of advertising money and use this money to reduce the price.

But more importantly, Tesla sees himself not just as a carmaker, but as a software company. Tesla's biggest bet is his fully automated driving (FSD) software. If this software is successful and is recognized and supported by the government and society, then Tesla will have a huge and stable source of income. Therefore, Tesla hopes to be able to produce and sell more cars and connect them to his network.

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