Tesla Inc

NASDAQ:TSLA  
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Tesla Motors Cut Prices Again




PREFACE: TESLA MOTORS INC (NASDAQ:TSLA)
Tesla Motors Inc (NASDAQ:TSLA) has set out ambitious goals to sell 500,000 vehicles by the year 2018. For context, Tesla sold 50,000 units last year, so the company is calling for a 1,0000% rise in sales in just five years. While much of that will come from the new Model 3, a less expensive sporty sedan with a starting price of about $35,000, Tesla Motors still needs to sell a large amount of its current line up, the Model S and the Model X.

While Model 3 sales are pegged to the enormous pre-order wave that came upon the launch of the prototype, the Model S and Model X may be in trouble and Tesla Motors has cut prices yet again on its high end vehicles.

BREAKING: TESLA MOTORS INC (NASDAQ:TSLA)
Reuters has published a note that Tesla Motors Inc will now be cutting the price of its SUV crossover Model X vehicle, which just began deliveries this year. The impetus for the cut to prices, according to Reuters, was a missed sales target.

Here's a snippet from the article:


Tesla said on Wednesday a new version of the Model X crossover, the 60D, will be priced from $74,000, $9,000 less than the Model X 75D. Equipped with a 60kWh battery, the 60D has less torque and a shorter range between charges than the 75D.

This cut to prices comes on the heels of a cut to prices on Tesla Motors Inc (NASDAQ:TSLA) other high end vehicle, the Model S. In a similar move, Tesla reduced the battery power and torque to the high end Model S to create a less expensive $66,000 Model S. That price cut comes out to about $9,000 from the base Model S that had been for sale. Of course, many Tesla Motors vehicles sell for over $100,000 once customized to the buyer's wants.

THE REALITY: TESLA MOTORS INC (NASDAQ:TSLA)
The reality that will drive Tesla Motors Inc stock higher (or lower) largely does not surround the demand for the Model S or Model X or various cuts to prices. There's a secret behind Tesla's goals to be the giant in the electric and self-driving vehicle world and the question analysts should be asking has no answer in the Model S or Model X. Tesla Motors will make or break its ambitious dreams with one very simple reality: demand for a vehicle that puts the company on a trajectory to be an actual seller of goods, rather than a luxury only, "product of the moment," distributor.

Supply problems are not the issue for Tesla Motors, but demand issues could be. Watch the Model 3 demand as it turns from pre-orders to actual orders. If Tesla Motors hits that goal, the rest is nothing but conversation.

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Thanks for reading, friends. The author is long Tesla shares.