February 28, 2022 - Halifax, Canada - Used Tesla model 3 sedans available to purchase at an all electric car dealership.
Tesla Inc. reported record-high quarterly vehicle deliveries, as well as modest sales growth due to the price cuts.
According to Reuters, Tesla delivered 422,875 vehicles in the first three months of 2018, a 4% increase over the previous quarter. This was 36% higher than the previous year.
Elon Musk, Tesla’s CEO, predicted in January that the company would deliver 2 million vehicles this year, a 52% increase over last year. Investors have been watching Musk’s bet that lowering prices would boost sales, though they are concerned about eroding margins.
Tesla slashed prices globally by up to 20% in January. The base Model Y, which used to cost $65,990, is now $54,990.
Gene Munster, a managing partner at Deepwater Asset Management, said on Sunday, that:
If they wouldn’t have done the price cut, it would have been ugly. I think what it tells you is the economy is getting tough.
While Tesla is performing well, it bears noting that it does not exist in a vacuum. Other electric vehicle (EV) makers, especially in China, are experimenting aggressively with cheaper and more pragmatic battery technology that would make EVs more accessible to people.
While Tesla is managing to cut manufacturing costs, and hence the prices, its progress is not yet fast and prudent enough.