- Tesla resorted to the same tricks automakers use to cover up their problems.
- Tesla appears to be struggling with a bloated inventory while its competitors are lean.
- “Now it looks like they’re going to be like everyone else,” analyst Ivan Drury said.
Long the biggest disruptor in the automotive industry, You’re here is acting more and more like the legacy automakers it used to shake.
by Elon Musk The automaker has spent much of the last year resorting to some of the same tricks automakers have long used to cover up their problems, signaling that the company that once struggled to meet demand is now struggling with the balance between supply and demand that its older competitors are familiar with.
“These are all very normal issues, but the difference is that it was Tesla that broke all the rules,” said Ivan Drury, automotive analyst for Edmunds. “Now we see them falling into these same traps that all automakers fall into.”
Tesla lowers prices
At the end of 2021, car rental giant Hertz said it had ordered 10,000 Tesla Model 3s for its fleet. The announcement was enthusiastically received by EV boosters, but experts and auto industry executives at the time questioned whether it was an early sign of overbuilding at Tesla. .
At the end of 2022, the electric car manufacturer offered itself an unprecedented one $7,500 off its Model 3 and Model Y vehicles – a sure sign that Tesla needed to move metal before the end of the year, experts said.
While rebates in the United States expired at the end of December, Tesla continues to make your vehicles stand out in Chinathe largest automotive market in the world.
Tesla appears to be struggling with bloated inventories at a time when the rest of the auto industry is running out of resources. Vacation deals were scarce industry-wide for the third straight year at the end of 2022, as industry pundits wondered if the days of the year-end blowouts were in the rearview mirror for good.
Tesla has rarely downsized its vehicles in the past. Musk has even spoken out against this practice in the past. And the year-end rebates came after months of price hikes, adding to the troubling nature of the deals.
Experts think discounts will continue
Meanwhile, Tesla stock price plummets amid Musk’s Twitter controversies and analyst concerns that the automaker is essentially operating without a CEO at the moment.
“This is a year-long turn in the road for Tesla that will lay the foundation for its next chapter of growth or continue its slide from the top of the roost with Musk leading the way down,” wrote Dan Ives, Wedbush analyst, in an earlier note. .. this week.
The real test of Tesla’s resolve will come in the first quarter, Drury said. Pundits and analysts will be watching to see if the electric car company returns to its no-holds-barred lifestyle or continues to draw inspiration from old industry playbooks.
Following Tesla’s fourth-quarter delivery results earlier this week, Deutsche Bank analyst Emmanuel Rosner said he expects price declines to continue.
“Further price action will likely be implemented to align demand with supply,” Rosner wrote in a note. “We expect the tough headlines about slowing demand and associated price declines to continue.”
Even if Tesla doesn’t offer cash offers, it could still incentivize purchases by pulling other levers. A common incentive this time of year is free maintenance, Drury said, which is comparable to Tesla’s offer of 10,000 free boost miles.
“It’s a company that has been quick to be different, but now it looks like it will be the same as everyone else,” Drury said.
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