- Tesla posted record first-quarter vehicle deliveries, though growth was modest due to its aggressive pricing strategy and competition in the electric vehicle market.
- The company is cutting prices to boost demand and stay ahead of the competition, with a goal of producing 20 million cars a year by 2030.
- Tesla also plans to open a new production plant in Mexico.
Tesla posted record quarterly vehicle deliveries between January and March. However, growth compared to the previous quarter was modest in a scenario of a very aggressive pricing strategy.
Indeed, Tesla has been applying strong discounts on the price of some of its vehicles and the brand expected it to give better results.
The drop in Tesla’s prices is due to increasing competition in the electric car market and the bleak outlook for the global economy.
Tesla sold just over 422,800 cars in the first quarter, 4 percent more than the quarter between October and December 2022, post this april 3 Reuters.
In the year-on-year comparison, the progress is notable: 36 percent more than between January and March 2022.
In January, Tesla CEO Elon Musk said he expects to sell 2 million vehicles in 2023, up more than 50% from 2022.
Tesla pricing strategy
The offer in the sale prices of a product has always been an effective marketing strategy to drive demand.
By lowering the marketing prices of their products, companies can make their products easier to buy for a broader range of customers, which generates better revenue, key to brand health.
In recent years, the use of this strategy had become more prevalent due to increasing competition in various industries.
According to information from HubSpotin the US last year 60 percent of companies reported that they had used some kind of price containment strategy as a way to boost demand.
The technological example of this strategy is Apple, when in 2020 it reduced the price of the iPhone SE by $50 with the aim of generating sales among a group of people for whom phones of that brand were impossible to buy.
Tesla’s Marketing Decisions
At the beginning of March, Tesla decided to reduce the sale price of two of its most expensive models, the Model S and the Model X.
It was the second cut in a few months, since it had already applied a similar strategy in 2022.
Tesla is pushing to stay ahead of the competition with its idea to increase its production to 20 million cars per year by 2030. Remember that in 2022 it produced 1.3 million.
Last month, Tesla confirmed that it plans to open a new car production plant in Mexico, in the state of Monterrey.
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