Tesla cuts Model S and Model X prices in the U.S

One of the things we weren't sure about was the price elasticity of demand for Tesla. So like as we lower the price, how much does demand increase? And we found that even small changes in the price have a big effect on demand, very big. So that was a good thing to learn. That's Elon Musk offering his take on price cuts at Tesla's investor day last week. We're now slashing prices for the S and the X in the United States for the second time this year, this time between 4 and 9 percent. In the case of the X, SUV, the price has been lowered by about $10,000 to just under $100,000. Web Bush today says, given the lead they have in margins and given the way the last round of price cuts acted, maybe this is a position of strength they're operating from.

Sure. Yeah, I would say that's absolutely true among those who are definitely going to buy an EV and choosing among them. It is refreshing that microeconomics, the laws of economics apply also to Tesla vehicles. But it does show you that, the big change from many, many years of, you know, we're supply constrained, demand is this bottomless pool, it doesn't really matter. But I also think that we make a lot more of Tesla list price changes than we pay attention to the way that other car makers just modulate their incentives and the dealers are running specials. So in other words, the effective price is often fluid for a lot of different types of cars. And yes, you'd have to say that they do start from a position of strength.

Although again, you always have to come back to the fact that the markets already give them copious credit for dominating for a long time to come based on where the stock is and the market value.

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