Part 4/9:
The Pricing and Market Impact: Why Under $35,000 Matters
The crux of Tesla’s strategic move hinges on pricing. Market analysis, especially through EV elasticity curves, underscores that lowering the Model Y price below $35,000 could dramatically expand Tesla’s Total Addressable Market (TAM) by up to 300%. At such price points, Tesla could reach millions more potential customers who are currently priced out of the EV market.
A detailed review of these elasticity curves reveals that even a modest reduction from current prices could have outsized effects on market share and overall adoption. If Tesla manages to bring the Model Y's MSRP below $35,000, it would be a game-changer, enabling the company to substantially grow its EV customer base and drive volume-based profits.