Even before the recession (not started yet), TSLA’s income dropped 24% year over year(i.e. went negative growth) and EM needs 6 times price cuts to prop up the demand.
When real recession in place with high 5%-7% interest rates for next 5 years, no way TSLA can recover back its current ATH $214 in next 5 years.
Unless company income grows exponentially, investors community won’t pay premium on price.
When recession ends, TSLA won’t be a growth stock but may be a DULL value stock like other car companies and it will survive many decades as EV leader.
Still TSLA is far better than many companies that may file bankruptcies during deep recession periods.
This is called a price war. Reducing the price in anticipation of future price advantage from economy of scale, operational efficiency and technology improvement. That’s what Dell tries to do. Where is Dell now? Intel started off with this strategy too and milk the market once most competitors are killed, where is Intel now?
What EM is doing is not price war, but when demand started reducing, he is reducing rate to meet the committed deliveries so that revenue is in line with expectation and struggling hard to match the income as expected growth.
With this, before recession itself, TSLA has negative growth and almost 15k/car is reduced in 6 or 7 price reduction eat away all the profits.
TSLA is just keeping the shop open and delivering cars at lower profit to keep the company/staff. They will struggle like other industries when deep recession hits the economy after Powell’s next rate hike.
It is the economy (as well as FEDs) putting all pressure, but TSLA and EM is doing their work/strategy to survive. This the main reason, blind investment is not right, but just a little analysis, when FEDs are acting, help make a big profit over long time.
It is just rebalancing or re-allocation of portfolio assets, which normally many funds/companies do!
MS means MSFT, right? If so, MSFT nearly become irrelevant until the new CEO, Satya Nadella, come onboard and focus on cloud computing.
Frankly, I view MSFT strategy more like as razor and blades strategy… not quite right analogy… whatever. Give away some products, so can sell other products… not quite same as… reduce prices to sell more of the same products.
First, price war is not correct as he is not reducing price to kill other competitors like GM. He has huge capacity to supply and continuously planned to roll out bigger scale mass production across the world. If the capacity is not adequately used, TSLA will struggle. Luckily Energy sector is growing.
He is fighting with FED’s demand reduction issue and is not price war.
I do not know the GK you mentioned, it is wrong and worthless suggestion. TSLA does not need any advertisement when 400000 orders came on first day registration!
If someone wants to buy a dealer-based car, even now, they need to spend 4 hours to finalize etc, but with TSLA it is 15 minutes online and 15 minutes delivery with no physical salesman either booking or delivery, everything optimized, and EM saved all overheads.
GK is a fool, but whoever it may be, but EM is not and he is doing right thing by reducing the price to customers.
What is happening and will happen is inevitable challenge for all industries, nothing specific to TSLA, and the company has to survive this recession to have a long life.
Hmmm, breaking the silence, answer is simple. This is the main part differentiate EV car and ICE car.
BATTERY storage technology.
EM put his chemists pre-TSLA period for 5-8 years to find ( inventions ) high density ( high capacity ) battery and he achieved a breakthrough technology.
He manufactures those in his gigafactories!
Till date, no one in the world matched his level.
He kept it tight secret long time and recently patented that technology.
Recently CATL is telling they made some technology double the level of TSLA, but everything in presentation ( power point ) only, nothing came to actual production.
This is secret of TSLA innovation technology that no one matched yet.
ATH
No comment on that 
