Written By Tesla, Inc., the world’s leading electric vehicle (EV) manufacturer, is facing a stock downturn, with shares dropping more than 15% in the first quarter of 2021. To mitigate this downturn, Tesla announced a price increase for its high-end Model S and Model X cars in the United States.
The move to raise prices has sparked criticism among some consumers and investors, who argue that the price increase may alienate potential buyers and hurt Tesla’s overall sales.
Tesla’s stock decline began in late 2020, when the company failed to meet production targets for its new Model Y SUV. In addition, concerns about the company’s valuation and competition from other EV manufacturers have contributed to the decline.
In response, Tesla has made a number of changes to its business strategy, including the price increase for the Model S and Model X. The price hike for the Model S and Model X ranges from $5,000 to $10,000 depending on the model, bringing the base price of the Model S to $79,990 and the base price of the Model X to $89,990.
The company has stated that the price increase is due to improvements to the vehicles, including longer ranges and faster charging times, and that it will not affect the more affordable Model 3 and Model Y.
Despite the price increase, Tesla remains optimistic about the future. In a recent earnings call, Tesla CEO Elon Musk stated that the company is on track to produce 500,000 cars in 2021 and that he expects Tesla’s annual production to reach 20 million cars within the next decade.
However, some industry experts are skeptical about Tesla’s long-term growth prospects, given the increasing competition from other EV manufacturers such as General Motors, Ford, and Volkswagen.
Tesla’s success has been driven in large part by its dominance in the luxury EV market. However, the recent price increase for the Model S and Model X may indicate a shift in the company’s focus from luxury cars to the broader EV market.
In addition to the price increase, Tesla has also made other changes to its business model, such as moving away from traditional advertising and relying more on word-of-mouth recommendations and social media marketing.
Overall, Tesla’s stock downturn and subsequent price increase for its high-end models reflect the challenges facing the company as it strives to maintain its position as a leader in the EV market. While Tesla remains optimistic about the future, it will likely face increasing competition from other manufacturers as the EV market continues to grow and evolve.
