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A recent report from CBS News notes that Elon Musk’s Tesla produced more cars than were ordered during their fourth quarter, which when combined with new price cuts for the electric cars, is leading many analysts to worry about consumer demand for the cars.
CBS News reports that analysts have become worried that Elon Musk’s electric car company may not be as popular as previously thought. Tesla reportedly produced 9,300 more vehicles than it sold last year, which when combined with Tesla reducing the cost of each vehicle by $2,000, has led analysts to begin worrying about the possible lack of demand for the electric cars.
CBS - News
CBS News writes:
If demand falls, they said, Tesla will enter a new phase of its business. Like other automakers, it will have to either cut production or reduce prices to raise sales. A drop in demand could also curtail earnings and jeopardize CEO Elon Musk’s promise to post sustained quarterly profits.
Wednesday - Tesla - Prices - Models - Company
On Wednesday, Tesla did cut prices, knocking $2,000 off each of its three models. The company said the reductions will help customers deal with the loss of a $7,500 federal tax credit, which dropped to $3,750 this month for Tesla buyers and will gradually go to zero by the end of 2019.
“They have for a long time had more demand than supply,” Gartner analyst Michael Ramsey said. “It’s becoming apparent that that dynamic is changing.”
Analysts - Demands - Tesla - Vehicles - Decline
Some analysts actually believe that previous demands for Tesla vehicles were artificially high and expected to see a decline in demand at some point:
Jeff Schuster, a senior vice president at the forecasting firm LMC Automotive, said demand for Tesla’s lower-priced Model 3 has been artificially high for the past six months as the company overcame production problems at its Fremont, California, factory.
Months - Deliveries - Schuster
“You’ve had these inflated months because of delayed deliveries,” Schuster said....
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