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A significant point of discussion is Tesla’s aggressive price adjustments in China. The company implemented multiple price cuts for the Model 3, with a total reduction of about 21% between January 2020 and July 2021. Historically, these cuts seemed to boost demand, leading to temporary website downtimes indicative of surging orders.
Recent analysis by industry observers suggests that these reductions have brought prices back to early 2022 levels, effectively increasing demand without negatively impacting Tesla's gross margins. Dylan from Electrified YouTube provided a breakdown, emphasizing that Tesla's prices in China are reverting to prior levels while demand continues to grow.