Musk says Tesla price cuts will ignite demand, sales could reach 2 million units in 2023

Aggressive price cuts by Tesla (TSLA.O) are boosting demand for electric cars, Chief Executive Elon Musk said Wednesday, downplaying concerns that a weak economy would dampen buyer interest. bottom.

The company on Wednesday slightly beat Wall Street targets for fourth-quarter sales and earnings, even as its auto profit margins shrunk sharply. It also sought to reassure investors it could cut costs to weather the recession and increased competition in the UK to deal with next year. .

Sharp price cuts this month have positioned Tesla as the starter of the price war, but the company’s forecast that annual car sales will rise by 37% to 1.8 million in 2022 was also lower.

But Musk, who has failed to hit Tesla’s ambitious sales targets in recent years, says deliveries could reach his 2 million units in 2023 barring external disruptions. .

Investors are watching Tesla’s sales prospects amid a weakening economy. The company says it is sticking to its long-term goal of increasing sales by 50% annually.

Musk addressed the issue at the beginning of a conference call with investors and analysts.

“These price changes are really making a difference for the average consumer,” he said, adding that car orders nearly doubled in January, prompting automakers to raise prices on Model Y SUVs slightly. He added that he urged

He said he expects a “pretty severe recession this year,” but that demand for Tesla cars “would be good overall, despite the potential slowdown in the car market.”

cyber truck
The company is betting on older products, and Musk said the next new electric pickup truck, the Cybertruck, won’t start mass production until next year, Reuters reported in November, saying the long-awaited model will arrive later this year. It is reported that it will not go into mass production until. Tesla plans to detail plans for its “next-generation vehicle platform” at Investor Day in March.

Jessica Caldwell, Edmunds’ executive director of insights, said all Tesla vehicles “are in dire need of non-software updates.” She said Tesla, like the Model 3 and Model Y, will rely heavily on cheaper devices to bring electric cars to the masses.

“Cybertruck is unlikely to try to reach mass-market volumes like its Detroit rival,” she said.