Wall Street veteran Gary Black thinks that cutting prices might not be the best strategy in the long run.
With multiple price cuts and increases, feature removals, and options reshuffling in the last months, Tesla has arguably started a price war in the world of EVs, with some rivals understandably cross with the American company’s decisions.to share his thoughts on the aggressive strategy employed by the Fremont EV maker thatBlack argues that this might not be the best strategy for Tesla, at least for now, adding that the price cuts don’t make a lot of sense.
“I just think the whole price cuts that they put in place don’t make a lot of sense… Every time they cut prices on, say, Model Y, by $1,000, it’s costing them $500 million,” said Gary Black on CNBC’s Last Call. “And really, what they need to do to continue to drive EV adoption is to teach people why an EV is better.”
Communication isn’t one of Tesla’s strong points, but Black thinks that educating the pool of potential customers enticed by the lower prices is what the American electric car manufacturer should be doing, emphasizing the better resale value compared to an internal combustion vehicle, as well as the positive impact for the environment.
“Communicate, educate. So, it’s a lower operating cost, it’s much easier to just plug it in your garage or in a charger rather than go to a filthy, dirty gas station, the technology is better, the autonomy is better, the resale value is better, and you’re doing something for the environment,” he said during the segment.
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