Part 5/10:
Competitors are largely in the dark about their actual margins, with many, including BYD and other major players, not disclosing their profitability or loss figures on EVs. This opacity makes Tesla's transparent financial strategy and emphasis on scaling all the more significant.
Price War and Market Positioning
Many analysts agree that initiating a price war benefits only the leader—Tesla, in this case. The strategy involves lowering prices preemptively to keep rivals at bay, thereby establishing dominance. Morgan Stanley highlights that Tesla’s capacity to reduce prices without sacrificing profitability gives it a decisive edge. This approach discourages competitors from engaging in drawn-out price battles, which tend to hurt all involved except to the winner.