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Tesla Goes After America’s Top-Selling SUVs

• ryzvonusef 4y ago
  > This much is clear from Tesla Inc.’s fifth price cut this year: Elon Musk is dead set on seizing much more of America’s SUV market. > Tesla’s Model Y already became one of the three best-selling sport utility vehicles in the US last year. That was remarkable considering the starting price of the Model Y was more than double the Toyota RAV4 and Honda CR-V, the market’s perennial favorites. Now, that cost barrier has been reduced to a speed bump. Since January, Tesla has lowered the Model Y starting price by 24%, the biggest drop of any of its vehicles. > A 24% price decline in three months is practically unheard of for such a high-volume vehicle. The closest analog may be the Model T, which Ford made dramatically cheaper in the 1920s by way of the moving assembly line. > Tesla’s constantly fluctuating prices are unique in the auto industry, although as Bloomberg established early this year, they tend to track closely with the broader US market. The base Model 3, for example, rarely drifted far from the US average the last couple years, while the Model S typically went for about twice as much. > Analysts disagree on whether Tesla’s price cuts are indicative of weakening demand or part of a long-term strategy to expand its addressable market while cutting costs. Regardless, the markdowns are putting pressure on other carmakers that already were having issues making money from manufacturing electric vehicles.